Crude oil futures traded higher on Friday morning as official data showed recovery in manufacturing activities in China.
At 9.52 am on Friday, July Brent oil futures were at $83.53, up by 0.31 per cent, and June crude oil futures on WTI (West Texas Intermediate) were at $79.36, up by 0.16 per cent.
May crude oil futures were trading at ₹6618 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6615, up by 0.05 per cent, and June futures were trading at ₹6603 against the previous close of ₹6591, up by 0.18 per cent.
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Continued Chinese Govt support
According to the National Bureau of Statistics of China, industrial production in that country grew by 6.7 per cent in April against 4.5 per cent growth in March. The market was expecting it to grow by 5.5 per cent.
Activities in manufacturing witnessed 7.5 per cent growth in April against 5.1 per cent in March, and mining witnessed 2 per cent growth against 0.2 per cent in March.
These stronger numbers follow the continued support measures by the Chinese government to manufacturing sector.
However, retail sales in China did not grow along the expected lines. Data by the National Bureau of Statistics of China showed that retail sales grew by 2.3 per cent in April against a growth of 3.1 per cent in March. Market was expecting 3.8 per cent growth in April.
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China is a major consumer of crude oil in the global market. The recent recovery in industrial production will help increase the demand for commodities such as crude oil.
Demand projected to rise
Meanwhile, the Oil Market Report by the International Energy Agency (IEA) for May said global oil demand is set to rise by 1.1 million barrels a day in 2024. This is 140,000 barrels a day less than projected in April’s report as weak deliveries, notably weak deliveries in Europe, shifted first-quarter OECD demand into contraction. It said the outlook for 2025 is comparatively unchanged, with the pace of growth now marginally surpassing 2024 at 1.2 million barrels a day.
World oil supply is projected to increase by 580,000 barrels a day this year to a record 102.7 million barrels a day as non-OPEC+ output rises by 1.4 million barrels a day while OPEC+ production falls 840,000 barrels a day, assuming that voluntary cuts are maintained.
The report said the global gains of 1.8 million barrels a day are expected in 2025 as non-OPEC+ adds a further 1.4 million barrels a day. In April, world oil supply fell from 200,000 barrels a day to 102 million barrels a day, it added.
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Jeera gains
May natural gas futures were trading at ₹209.60 on MCX during initial trading against the previous close of ₹208.10, up by 0.72 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), June contracts were trading at ₹28,030 against the previous close of ₹27,830, up by 0.72 per cent.
June cottonseed oilcake futures were trading at ₹2,651 on NCDEX in the initial hour of trading on Friday morning against the previous close of ₹2,645, up by 0.23 per cent.
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