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6
June 2017
The
Indian basket of crude oils closed below the psychologically important
$50-a-barrel mark on Monday as geopolitical tensions in the Middle East raised
market concerns.
Crude
prices continued on their downward spiral following the OPEC cartel's decision
last month to extend output cuts. The
Total Investment & Insurance Solutions
According
to the latest official data, the Indian basket, comprising 73 per cent
sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed
trade on Monday at $48.58 for a barrel of 159 litres. It had previously closed
lower on Friday at $48.53.
The
US West Texas Intermediate for July delivery lost $0.26 to settle at $47.40 a
barrel on the New York Mercantile Exchange on Monday, while Brent crude for
August delivery erased 48 cents to close at $49.47 a barrel on the London ICE
Futures Exchange.
The
United Arab Emirates (UAE), along with Saudi Arabia, Bahrain and Egypt cut
diplomatic ties with Qatar, accusing the Gulf state of supporting and financing
"terrorism" as well as of interfering in their internal affairs. The Total Investment & Insurance Solutions
The
decision of a number of Arab countries to sever diplomatic relations with
gas-rich Qatar would impose a strict regional isolation on Doha, and raised
concerns about a global deal reached last month to reduce oil production in
order to check the fall in prices resulting from a global supply glut. The Total Investment & Insurance Solutions
The
13-nation Organisation of Petroleum Exporting Countries (OPEC) late in May
agreed in Vienna to extend for nine months the output cut agreement put in
place for six months effective from January 1. The extension of the accord,
which was to expire in June, would effectively lower the OPEC's production by
1.8 million barrels per day.
Earlier
last month, Saudi Arabia and Russia agreed on the need to prolong the current
agreement on oil production cuts. The Total
Investment & Insurance Solutions
In
early December, oil producers outside OPEC, led by Russia, agreed to reduce
output by 558,000 barrels per day (bpd). This decision came in the wake of
OPEC's November 30 decision to cut output by 1.2 million bpd for six months
effective from January 1.
The
OPEC basket of 13 crude oils closed trade on Monday at $47.37 a barrel.
In
December, it was the first time since 2001 that OPEC and some of its rivals had
reached a deal to jointly reduce output to tackle the global oil glut.
Oil
prices had earlier fallen by more than 50 per cent in less than two years, from
levels of over $120 a barrel. The Total
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While
the OPEC and non-OPEC producers agreed to extend until March 2018 their ongoing
oil output cuts, India has reached an understanding with the global oil cartel
to establish a joint working group to serve as a forum for
"producer-consumer dialogue" to address mutual concerns. The Total Investment & Insurance Solutions
Indian
Petroleum Minister Dharmendra Pradhan was present in Vienna at the time of the
OPEC meeting on May 25 that agreed to extend the ouptput cuts, and led the
Indian side at the India-OPEC Energy Dialogue earlier that week.
"I
believe the purpose of setting up this institutional dialogue is to exactly
serve this, and to have a dialogue between OPEC as a producer and India as a
consumer, to sensitise each other's concerns and to better understand our
perspectives," he said at the meeting.
In
the talks with OPEC Secretary General Mohammad Sanusi Barkindo, the Indian
minister told OPEC to address concerns of major buyers like India at a time
when there were multiple options in a situation of supply glut caused by US
shale oil.
Making
their fortnightly revision in fuel prices on June 1, state-run oil marketing
companies in India raised the price of petrol by Rs 1.23 per litre, and of
diesel by 89 paise, excluding state levies. Petrol in Delhi currently costs Rs
66.91 a litre, while diesel costs Rs 55.94.The Total Investment & Insurance Solutions
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