Crude oil declines as China’s GDP growth target fails to impress market

Crude oil futures traded lower on Tuesday morning as China’s GDP growth target failed to impress the markets.

Also read: Crude oil up as OPEC+ members extend voluntary output cuts

At 9.52 am on Tuesday, May Brent oil futures were at $82.59, down by 0.25 per cent, and April crude oil futures on WTI (West Texas Intermediate) were at $78.42, down by 0.41 per cent.

March crude oil futures were trading at ₹6,506 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,527, down by 0.32 per cent and April futures were trading at ₹6,495 as against the previous close of ₹6,512, down by 0.26 per cent.

Same as in 2023

A report released during National People’s Congress of China has set gross domestic product (GDP) growth target of 5 per cent for 2024. This target is same as that of 2023.

Market reports said though the proposed target could help increase fuel consumption, it would not be easy to achieve the target when compared to 2023. The reports said the year 2023 benefitted from the favourable base effect of a pandemic-affected 2022.

The report of National People’s Congress of China also focussed its attention to tighten control over the consumption of fossil fuel.

A private Purchasing Managers Index (PMI) data showed that services activity in China slowed down during February. China Caixin Services PMI was at 52.5 for February against 52.7 in the month prior to that. Market was forecasting it at 52.9 for February.

China is a major consumer of crude oil in the global market and the above data failed to boost the market sentiments on the demand for the commodity from that market.

Guar gum gains; kapas slips

March natural gas futures were trading at ₹159.10 on MCX against the previous close of ₹162.60, down by 2.15 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), March guar gum contracts were trading at ₹10,235 against the previous close of ₹10,197, up by 0.37 per cent.

Also read: Crude Check: Resistance invalidated

April kapas futures were trading at ₹1,646 on NCDEX against the previous close of ₹1,650, down by 0.24 per cent.