Crude oil futures traded lower on Friday morning as China decided to keep its loan prime rate (LPR) unchanged despite less encouraging economic activities in that country.
At 9.55 am on Friday, November Brent oil futures were at $74.78, down by 0.13 per cent, and November crude oil futures on WTI (West Texas Intermediate) were at $71.02, down by 0.20 per cent.
October crude oil futures were trading at ₹5950 on Multi Commodity Exchange (MCX) during the initial hour of trading on Friday against the previous close of ₹5963, down by 0.22 per cent, and November futures were trading at ₹5913 against the previous close. of ₹5928, down by 0.25 per cent.
On Friday, the People’s Bank of China (PBoC) kept its benchmark lending rates unchanged. The one-year LPR, which is a benchmark for corporate and household loans, kept unchanged at 3.35 per cent. The five-year rate, which is used as a reference for property mortgages, kept unchanged at 3.85 per cent.
Recent data by National Bureau of Statistics of China showed that China’s industrial production increased by 4.5 per cent in August against 5.1 per cent in July. However, the market was expecting it to be around 4.8 per cent. Though retail sales in China expanded by 2.1 per cent year-on-year in August, it was below 2.7 per cent growth in July. Market was expecting it to grow by 2.5 per cent in August.
There was also decline in crude oil processing in China in August. Refiners in China processed around 12.6 million barrels a day of crude oil in August, down almost 10 per cent month-on-month and 17.5 per cent lower year-on-year.
China is a major consumer in the global crude oil market, and the economic developments in that country impact the demand for the commodity.
Meanwhile, tensions in West Asia supported the price of the commodity on Friday morning. There is an apprehension over the possible supply disruptions from West Asia following the recent pager and walkie talkie blasts in Lebanon.
The decision of the US Federal Reserve on Wednesday to reduce interest rates by 50 basis points also helped support the price of the commodity, as it would help boost economic activities and the demand for the commodity.
September lead futures were trading at ₹185.15 on MCX during the initial hour of trading on Friday against the previous close of ₹185.30, up by 0.46 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), September guargum contracts were trading at ₹10875 in the initial hour of trading on Friday against the previous close of ₹10644, up by 2.17 per cent.
October turmeric (farmer polished) futures were trading at ₹14068 on NCDEX in the initial hour of trading on Friday against the previous close of ₹14172, down by 0.73 per cent.
