Crude oil futures traded lower on Monday morning, pressured by weak economic data from China and ongoing uncertainty regarding US tariffs. This downturn comes as global oil market participants weigh concerns over Chinese economic conditions and the broader impact of trade policies.
Crude Oil Price Movements
Brent Oil Futures (May): Dropped by 0.44% to $70.05 per barrel.
West Texas Intermediate (WTI) Oil Futures (April): Fell by 0.48% to $66.72 per barrel.
Indian Market (MCX): March crude oil futures were trading at ₹5833 per barrel, down by 0.43%, and April futures at ₹5832, down by 0.38%.
Weak Economic Data from China
A key factor behind the decline in crude oil prices is the latest economic data from China, one of the world’s largest consumers of crude oil. Both consumer and producer price inflation data released by China showed a deflationary trend, raising concerns about weakening demand.
Consumer Price Index (CPI): In February 2025, China’s consumer prices declined by 0.7% year-on-year, worsening from a decline of 0.5% in January.
Producer Price Index (PPI): Producer prices also dropped by 2.2% year-on-year in February, slightly better than the 2.3% decline in January but still worse than the expected 2.1% drop.
These figures signal weak domestic demand, which has implications for global commodity markets, including oil.
Impact on Chinese Crude Oil Imports
China’s crude oil imports in the first two months of 2025 were reported at 83.85 million tonnes, or approximately 10.4 million barrels per day, marking a 3.4% decline compared to the same period last year. This is also a drop from the 11.3 million barrels per day imported in December 2024. This slowdown in crude oil imports points to weakening demand from the world’s largest oil importer, contributing to downward pressure on oil prices.
US Tariff Uncertainty and Market Impact
The uncertainty surrounding US tariffs also played a role in the weaker oil market. While there was some recovery in oil prices last week, as Brent managed to edge above $70 per barrel, ongoing tariff concerns have kept the market volatile.
US Tariff Concerns: The fluctuation in US tariff policies, especially with respect to China, has caused significant market uncertainty. These tariff policies could potentially impact global trade and economic growth, further weighing on demand for oil.
OPEC+ and Supply Concerns
The latest data from Saudi Arabia regarding official selling prices (OSPs) for April cargoes indicated cuts across most regions, though OSPs for the US remained unchanged. The cut in prices for Arab Light crude into Asia, by $0.40 per barrel, is a response to concerns over a potential supply glut due to increasing production from OPEC+ members. This is occurring at a time when demand remains uncertain.
Other Commodities
Natural Gas: March natural gas futures on MCX surged by 9.51% to ₹402.90.
Cottonseed Oilcake: March contracts on NCDEX rose by 0.45% to ₹2663.
Jeera: March jeera futures on NCDEX fell by 0.77% to ₹21165.
Conclusion
Crude oil prices are facing pressure from weak economic data out of China, reflecting sluggish demand in one of the world’s largest oil-consuming nations. The uncertainty surrounding US tariff policies and concerns about global oil supply from OPEC+ have further contributed to the market’s bearish sentiment. As oil futures continue to fluctuate, investors will be closely monitoring both economic indicators and geopolitical developments for further guidance on future price movements.
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