Crude oil futures saw an uptick on Monday morning, driven by China’s decision to reduce its lending rate in a bid to invigorate its economy.
As of 9:56 AM on Monday, Brent oil futures for September delivery were trading at $83.11 per barrel, marking a 0.58% increase. Similarly, September futures for West Texas Intermediate (WTI) crude stood at $79.05 per barrel, up by 0.52%.
On the Multi Commodity Exchange (MCX), August crude oil futures were priced at ₹6,625 in early trading on Monday, up 0.20% from the previous close of ₹6,612. September futures on MCX were trading at ₹6,565, rising 0.18% from the previous close of ₹6,553.
The People’s Bank of China has reduced its one-year loan prime rate (LPR) by 10 basis points to 3.35%. The one-year LPR serves as the benchmark for most corporate and household loans. Additionally, the five-year rate, a benchmark for property mortgages, was also cut by 10 basis points to 3.85%.
China’s decelerating economic growth has dampened global demand for commodities like crude oil, as the country is the world’s second-largest consumer of crude. The reduction in LPR is aimed at boosting economic activity within China.
Reports of ongoing peace talks between Israel and Hamas have also buoyed crude oil prices. Media sources indicate a potential ceasefire agreement could be reached within the week, a development that would contribute to stabilizing the West Asian region and mitigate risks to crude oil supply.
In other news, U.S. President Joe Biden announced he will not seek re-election, endorsing Vice President Kamala Harris as the Democratic candidate against former President Donald Trump. Investors are closely monitoring the potential market impacts of this political shift. Trump has pledged to ramp up oil production if he secures a second term.
In the natural gas market, August futures on MCX were trading at ₹185 in the initial hours of Monday, up 1.93% from the previous close of ₹181.50.
On the National Commodities and Derivatives Exchange (NCDEX), August contracts for turmeric (farmer polished) were trading at ₹16,050 early on Monday, up 1.10% from the previous close of ₹15,876. August jeera futures on NCDEX were priced at ₹26,790, a 0.64% increase from the previous close of ₹26,620.
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