There has been a decline in the prices of crude oil today, Monday, October 19. After reaching close to $ 110 per barrel on Friday, Brent crude slipped to $ 108.06. The market has got relief from US President Donald Trump’s decision to remove some sanctions and tariffs on Russia. Apart from this, there has also been news of relief from America regarding the supply of oil from the Strait of Hormuz.
However, amid increasing tension in the Middle East, there is still concern about oil prices. In such a situation, the question is whether petrol and diesel will become cheaper in India due to this fall in crude oil?
Crude oil slips from 5 month high
On Friday, the price of Brent crude had reached $ 110 per barrel. This was its highest level after May 19. But on Monday it fell by $ 1.80 or about 1.64% and the price reached $ 108.06 per barrel. At the same time, American West Texas Intermediate (WTI) crude fell by 53 cents or 0.52% to $ 100.88 per barrel.
Relief to the market from Trump’s decision
US President Donald Trump on Friday signed an executive order pausing some sanctions and tariffs under the Graham Act. With this decision, the supply of oil and other fuels from Russia is expected to increase. This law was brought last month to put pressure on Russia.
Relief on oil supply from Hormuz
America has said that with the help of its troops, more than 100 million barrels of oil were safely taken out of the Strait of Hormuz last week. This has brought some relief to the shortage of oil in the world. However, the supply has been affected due to increasing attacks on ships in this area. According to analytics firm Kpler, last week the supply of crude oil from the Gulf region decreased on a seven-day average to about 85 lakh barrels per day. Earlier it was more than 2 crore barrels per day.
Concern increased due to tension in the Middle East
Saudi Arabia intercepted several missiles over the Red Sea on Friday. One of these missiles was heading towards Yanbu, which is an important center for oil export. Saudi Arabia also destroyed three drones in Riyadh and southern areas. Yemen’s Houthi rebels have carried out several attacks on Saudi Arabia this week. Earlier on Tuesday, an administrative building of Saudi Aramco was targeted in Dhahran. Riyadh’s International Airport was also attacked on October 10. Amidst Iran’s efforts to stop the supply of oil, there have been reports of attacks on ships in the Strait of Hormuz.
Can crude oil go up to $120?
JP Morgan says that it is difficult to predict where and in which direction oil prices will go. According to Goldman Sachs, if attacks on ships in the Middle East increase further, crude oil could reach $ 120 per barrel. At the same time, if oil exports return to normal levels, prices may fall to $80. Goldman Sachs believes that disruption in the movement of ships is now a major factor affecting oil prices. Reduction in supply may have a greater impact on the prices of gas and refined fuel than that of crude oil.
Will the prices of petrol and diesel decrease in India?
So far this year, the prices of Brent crude have increased by more than 75%. Due to tension in the Middle East and the Russia-Ukraine war, concerns about oil supply have increased. The market has definitely got some relief from Monday’s fall, but it is difficult to say whether the prices of petrol and diesel in India will reduce immediately. However, the prices of petrol and diesel have remained the same since May.
Relief amid fluctuations in crude oil, petrol and diesel cheapest in Delhi
Despite the fluctuations in the prices of crude oil in the international market, even today the Government Oil Marketing Companies (OMCs) have not made any change in the prices of petrol and diesel. The prices of petrol and diesel differ in different states and cities of the country according to VAT, transportation and local taxes. However, petrol and diesel are slightly cheaper in the country’s capital Delhi as compared to other big cities. Today in Delhi, petrol is being sold at ₹ 102.12 per liter and diesel at ₹ 95.20 per liter.
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Source: ndtv.in
