New Delhi: Crude oil prices were under pressure on Thursday after a rise in US crude oil inventories and OPEC and allies’ decision to increase production by 100,000 barrels per day in September.
Brent September was at $96.78 a barrel on the Intercontinental Exchange around 1230 pm, the lowest since February 21. The September contract for West Texas Intermediate (WTI) on the NYMEX was at $90.67 a barrel, having fallen to $90.66 in the previous session, the lowest since February 10.
US crude inventories rose unexpectedly last week as exports fell and refiners cut short runs. According to the Energy Information Administration, stocks of gasoline were also up in the midst of slowing demand.
US crude oil stocks rose 4.5 million barrels last week, compared to an expected draw of 600,000 barrels.
Analysts said lower-than-expected output growth by OPEC and allies supported prices.
Ravindra Rao, Head of Commodity Research at Kotak Securities, said: “… there are concerns of support price strengthening amid reduced supplies from Russia and OPEC’s decision to increase output marginally.”
The fall in crude oil prices is a good sign for India as the country imports 85% of its energy requirements.
India is trying to diversify its oil sources amid the Russia-Ukraine conflict and the posed supply risks.
Last week, the Union Cabinet approved an additional $1.6 billion investment by Bharat Petro Resources Limited, a wholly owned unit of state-run BPCL, for the development of Brazil’s oil block.
According to S&P Global Commodity Insights, the $1.6 billion investment in a project to equity oil in Brazil highlights India’s strategic interest to explore opportunities abroad, and New Delhi is now exploring such opportunities in other Latin American countries as well. Eager to find out. ,
Lim Jit Yang, advisor to Asia-Pacific oil markets at Platts Analytics, said, “In addition to expanding strategic petroleum reserves and diversifying its crude supply sources, the government is trying to bring in oil from foreign equity assets in the event of supply disruptions. has been.”
“Supply security is becoming more important as global excess capacity has been uncomfortably low. In addition, India’s old oil wells are struggling to keep their domestic oil production stable amid rising oil demand.”
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