The ministry of finance is likely to assume crude oil price to remain within $85 per barrel while estimating subsidies for the Interim Budget 2024-25 (FY25), to be presented on February 1. Brent crude prices moved up on Thursday, ending at $78.9 per barrel. Crude oil and cooking gas prices, which move in tandem, impact fertiliser and cooking gas subsidies, constituting 53 per cent of the government's total subsidies.
The oil industry experienced three upheavals between 1973 and 1991, which seem to be etched in the memory of the industry's decision makers. Naturally, at the sign of a new crisis, the decision makers like to dip into those tumultuous decades to find ways to deal with the new shock, in addition, of course, to expert reports and forecasts. So, the industry bigwigs turned the pages of history to get a peek into the future of oil price movements after Russia invaded Ukraine in 2022, Israel attacked Gaza in 2023, Iran-linked Houthi rebels pounded tankers crossing the Red Sea in support of Palestine the same year, and Iran rained missiles on Israel in 2024.
India's import of cheap Russian oil scaled another record in May and is now more than the combined oil bought from Saudi Arabia, Iraq, UAE and the US, industry data showed. India took 1.96 million barrels a day from Russia in May, 15 per cent more than the previous high in April, according to data from energy cargo tracker Vortexa. Russia now makes up for nearly 42 per cent of all crude oil India imported in May.
Investors are showing some interest in the downstream energy cycle. Refiners and marketers, especially the public sector (PSU) oil marketing companies (OMCs) could see a revival of marketing margins. Lower crude oil and gas prices may also improve margins in industries like paints, logistics, synthetic fabrics, plastics, and fertilisers. In the medium-term, however, there could be a supply overhang affecting OMCs as new refining capacities are scheduled to be commissioned, especially in China, and this may lead to a drop in the refining margins as capacity would be surplus to demand until and unless there's a pick-up in global growth.
Qatar Petroleum while confirming the withdrawal, tweeted, "Qatar announces it was withdrawing from the Organisation of Petroleum Exporting Countries effective 1 January 2019."
Oil prices could reach $100 per barrel if there were "dramatic" developments in the Gulf or elsewhere, a leading oil official has said.
The Organisation of the Petroleum Exporting Countries (OPEC) has decided to cut its daily oil production by about 2 million barrels. OPEC's daily output target is 27.3 million barrels.
The Financial Times, London, reports that Nobuo Tanaka, the first Asian head of the International Energy Agency, has stated that the organisation must work more closely with the two Asian giants.
Various global and domestic factors had a sizable impact on the performance of the Indian markets
Crude oil has fallen about 40 per cent since mid June and the price on Monday touched its lowest level since mid 2009 before US oil prices posted their biggest one-day gain in two years overnight.
'A 2018 murder may lead to shifts in the geopolitical order and impact at least one monarchy,' says Devangshu Datta.
'The impact of COVID-19 on the economy has been so overwhelming that even a significant drop in global oil prices, which in normal times would have brought cheer, has posed new challenges for the government,' observes A K Bhattacharya.
Indian companies place orders worth $600 million for US crude, which is likely to increase by nearly $2 billion in the near future.
Govt unlikely to cut excise duties to compensate for higher global prices, say analysts.
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The 30 Sensex companies alone, which are among the biggest companies in the country, now account for nearly 50% or about Rs 47 lakh crore of total investor wealth.
Top gainers among the S&P BSE Sensex include GAIL, Dr Reddy's Laboratories and Bharti Airtel, all edging up by 1% in late morning deals
Saudis are interested in expanding their relationship with India, given it is becoming the main driver of crude demand growth in Asia
Top gainers from the Sensex pack are Infosys, Cipla, NTPC, ITC and Lupin
Saudi Arabia's deep pockets and a strong financial system could help the country to ride out a low-price environment in order to protect its market share.
The task of Union Finance Minister Arun Jaitley to keep inflation under check, even when the country reeled under severe drought for two years in a row, and reduce the current account deficit, was made easier by low crude oil prices.
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