Crude oil futures traded lower on Monday morning due to weak economic data from China and uncertainty surrounding US tariffs.
At 9.58 am on Monday, May Brent oil futures were at $70.05, down by 0.44 per cent, and April crude oil futures on WTI (West Texas Intermediate) were at $66.72, down by 0.48 per cent. March crude oil futures were trading at ₹5833 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹5858, down by 0.43 per cent, and April futures were trading at ₹5832 against the previous close of ₹5854, down by 0.38 per cent.
Both consumer and producer price inflation data released by China showed deflationary trend in that country. China is one of the major consumers of crude oil in the global market.
According to National Bureau of Statistics (NBS) of China, consumer prices declined by 0.7 per cent year on year in February 2025 against a decline of 0.5 per cent in January. Market was expecting a decline of 0.5 per cent.
NBS data showed that producer prices in China declined by 2.2 per cent year on year in February 2025 against a decline of 2.3 per cent in January. Market was forecasting a decline of 2.1 per cent.
In their Commodities Feed for Monday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said Chinese inflation data is one of the key drivers behind the weakness in the crude oil market.
Giving details about China’s crude oil imports, they said crude oil imports in the first two months of 2025 totalled 83.85 million tonnes — or around 10.4 million barrels a day — down 3.4 per cent year on year and below the roughly 11.3 million barrels a day imported in December.
They said downward pressure on US equities last week spilled over into the oil market, with ICE Brent settling almost 3.9 per cent lower. Though prices managed to creep back above $70 a barrel towards the end of last week, they’re now edging lower. Tariff uncertainty is a key driver behind the weakness, they said.
Referring to the latest official selling prices (OSPs) released by Saudis for April loadings, they said it shows cuts across almost the board, although OSPs into the US were unchanged.
The flagship Arab Light crude into Asia was cut by $0.40 a barrel over the benchmark. The reduction comes amid growing concern over the market balance with OPEC+ supply set to increase at a moment of increasing uncertainty over demand, they said.
March natural gas futures were trading at ₹402.90 on MCX during the initial hour of trading on Monday against the previous close of ₹367.90, up by 9.51 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), March cottonseed oilcake contracts were trading at ₹2663 in the initial hour of trading on Monday against the previous close of ₹2651, up by 0.45 per cent.
March jeera futures were trading at ₹21165 on NCDEX in the initial hour of trading on Monday against the previous close of ₹21330, down by 0.77 per cent.