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Friday, July 19, 2024
HomeMarkets NewsCrude dips on weak Chinese demand, prospects of supply from Iraq resuming

Crude dips on weak Chinese demand, prospects of supply from Iraq resuming

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Crude oil futures traded lower on Tuesday morning as weak economic growth in China continued to affect demand for the commodity. In addition, the market is awaiting the outcome of the meeting between Iraqi and Turkish oil ministers on the resumption of Iraqi oil exports from the Ceyhan oil terminal in Turkey.

At 9.52 am on Tuesday, October Brent oil futures were at $84.36, down by 0.12 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $80.03, down by 0.11 per cent.

September crude oil futures were trading at ₹6,658 on the Multi Commodity Exchange (MCX) during initial trading, against the previous close of ₹6,674, down by 0.24 per cent, and October futures were trading at ₹6,641, against the previous close of ₹6,658, down by 0.26 per cent.

Chinese imports drop

China, which is a major buyer of crude oil in the global market, is facing economic uncertainties. The recent economic indicators were not in line with the market expectations on economic recovery in that country. Moves by China’s central bank to reduce the one-year loan prime rate by 10 basis points also failed to enthuse the markets.

Recent reports also indicated that China’s oil imports declined in July due to huge stock of the commodity in the country. Economic uncertainties and lack of demand from this major buyer are affecting prices of the commodity in the global market.

Meanwhile, a Reuters report said the Iraqi oil minister, Hayan Abdel-Ghani, is likely to discuss the resumption of oil exports through the Ceyhan oil terminal in Turkey during his visit to Turkey.

On March 25, Turkey stopped the export of around 450,000 barrels a day of Iraqi crude oil from the northern Iraq-Turkey pipeline following an arbitration ruling by the International Chamber of Commerce (ICC).

Any resumption of exports will ease the tight crude oil supply situation in the oil market. Recent moves by the major producers such as Saudi Arabia and Russia to bring down production output have led to a tight supply situation in the market.

Jeera dips, guar gum, turmeric gain

August mentha oil futures were trading at ₹1,028 on MCX against the previous close of ₹1008.60, up by 1.92 per cent.

On NCDEX, guar gum October contracts increased by ₹132 to ₹13,677 a quintal. Jeera September futures dropped by ₹320 to ₹58,900 a quintal. Turmeric October futures increased by ₹80 to ₹16,088 a quintal.





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