Fuel prices decline for second time in three days; crude oil rises as Saudi Arabia cuts supply to US, Venezuela exports fall

Fuel prices declined in major cities across the country for the second time in three days on Thursday even as crude oil rates rose for a third day, pushed up by lower imports into the United States amid Organisation of the Petroleum Exporting Countries' (OPEC) efforts to tighten the market and the crisis in Venezuela.

Public sector oil marketing firms slashed petrol and diesel prices up to 10 paise and 9 paise respectively amid rising crude prices and falling rupee.

After Thursday's price revision, petrol in Delhi was sold at Rs 71.09 a litre, Mumbai Rs 76.72, Chennai Rs Chennai Rs 73.80 and Kolkata Rs 73.18 per litre, according to data available on Indian Oil Corporation website. Similarly, diesel in Delhi was retailed at Rs 65.81 a litre, Mumbai Rs 68.91, Chennai Rs 69.52 and Koklata Rs 67.59 per litre.

Fuel prices decline for second time in three days; crude oil rises as Saudi Arabia cuts supply to US, Venezuela exports fall

Representational image. Reuters.

Meanwhile, crude oil prices rose for a third day on Thursday, pushed up by lower imports into the United States amid OPEC efforts to tighten the market, and as Venezuela struggles to keep up its crude exports after Washington imposed sanctions on the nation.

US West Texas Intermediate (WTI) crude futures were at $54.63 per barrel, up 40 cents, or 0.7 percent, from their last settlement. International Brent crude oil futures were up 59 cents, or 1 percent, at $62.24 per barrel.

The price rise came after a report from the US Energy Information Administration (EIA) on Wednesday showed a drop in Saudi crude supply to the United States.

“Crude oil prices were stronger after signs emerged that OPEC cuts are impacting trade. EIA’s weekly report showed that US imports from Saudi Arabia fell by more than half from the previous week to 442,000 barrels per day (bpd). This is the second lowest level in weekly data going back to 2010,” ANZ bank said.

Saudi Arabia is the de-facto leader of the OPEC, which together with some non-OPEC producers, including Russia, announced supply cuts late last year aimed at tightening the market and propping up prices.

US sanctions imposed on Venezuela’s state-oil firm PDVSA this week are also causing some supply disruptions.

Venezuela’s oil inventories have started to build up at the country’s ports and terminals as PDVSA is finding it cannot export crude at its usual rate due to US sanctions imposed earlier this week. As of Wednesday, Venezuela had 25 tankers with nearly 18 million barrels of crude - representing about two weeks of the country’s production - either waiting to load or expecting authorization to set sail, shipping data showed.

Despite these disruptions, oil remains in ample supply, not least because of soaring US crude oil production, which jumped by more than 2 million bpd last year to a record 11.9 million bpd.

This shows in high US commercial crude oil stockpiles, which rose by 919,000 barrels in the week to 25 January, to 445.94 million barrels, EIA data showed. Stockpiles are 6.6 percent higher than a year ago.

With Reuters inputs

 

 

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Updated Date: Jan 31, 2019 16:01:20 IST

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