Crude oil futures slip on impact of new Chinese Covid lockdowns

Crude oil futures traded lower on the global markets on Friday as fresh Covid-induced lockdowns were imposed in parts of China. The development comes at a time when the US market is witnessing a revival in the demand for fuel. The US and China are the major consumers of crude oil in the global markets.

At 10.04 am on Friday, August Brent oil futures were at $122.30, down by 1.03 per cent, and July crude oil futures on WTI were at $120.83, down by 0.56 per cent.

June crude oil futures were trading at ₹9,380 on Multi Commodity Exchange (MCX) in the early deals against the previous close of ₹9,473, down by 0.98 per cent; and July futures were trading at ₹9,223 as against the previous close of ₹9,305, down by 0.88 per cent.

Zero Covid policy

China has issued fresh lockdown alerts in Shanghai and Beijing as a measure to curb Covid. Chinese city of Shanghai, the financial hub, also announced a round of mass testing during the weekend.

At a time when many countries are trying to live with the Covid, China has a zero-Covid policy to cut the transmission.

The recent weekly petroleum status report of the US Energy Information Administration (EIA) had showed an increase in supplies during the four-week period, indicating a revival of demand.

Even the US crude oil refinery inputs averaged 16.4 million barrels a day for the week ending June 3. This was 355,000 barrels more than the previous week’s average.

Guar gum slips

Though OPEC (Organization of the Petroleum Exporting Countries) and its allies had recently announced increasing output to ease tight supply situation in the global market, some members of OPEC+, including Russia are not in a position to raise their capacity due to various reasons.

June natural gas futures were trading at ₹698.40 on MCX in the early trade against the previous close of ₹691.30, up by 1.03 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), June steel long futures were trading at ₹47,900 in the initial trade against the previous close of ₹47,800, up by 0.21 per cent.

June guar gum contracts were trading at ₹11,150 on NCDEX in the morning trade against the previous close of ₹11,236, down by 0.77 per cent.

Published on

June 10, 2022

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