Fuel prices rise after a gap of nearly three weeks as crude rates up on hopes of positive outcome in Sino-US trade talks

Petrol and diesel prices increased on Monday by up to 22 paise and 9 paise respectively after a gap of nearly three weeks as crude rates jumped on Monday, pushed up by optimism that talks in Beijing can resolve a trade war between the United States and China, while supply cuts by major producers also supported crude.

After the price hike, petrol was sold in Delhi at Rs 68.50 per litre, in Mumbai Rs 74.16, Chennai Rs 71.07 and Kolkata Rs 70.64 a litre on Monday, according to data available on the Indian Oil Corporation website. Diesel was retailing in Delhi at Rs 62.24 per litre, Mumbai Rs 65.12, Chennai Rs 65.70 and Kolkata Rs 64.01 a litre.

 Fuel prices rise after a gap of nearly three weeks as crude rates up on hopes of positive outcome in Sino-US trade talks

Representative image. Reuters

Domestic fuel prices increased last on 17 December, 2018.

Meanwhile, crude prices jumped by more than 1 percent on Monday, pushed up by optimism that talks in Beijing can resolve a trade war between the United States and China, while supply cuts by major producers also supported crude.

Brent crude futures were at $57.86 per barrel, up 80 cents, or 1.4 percent, from their last close.

US West Texas Intermediate (WTI) crude oil futures were at $48.77 per barrel, up 81 cents, or 1.7 percent.

Financial markets were riding a relief rally on Monday on expectations that face-to-face trade negotiations between delegates from Washington and Beijing, starting Monday, would lead to an easing in tensions between the two biggest economies in the world.

The United States and Beijing have been locked in an escalating trade spat since early 2018, raising import tariffs on each other’s goods. The dispute has weighed on economic growth.

Despite the likelihood of a slowdown, crude future prices were being supported by supply cuts started late last year by a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC Russia.

OPEC oil supply fell in December by 460,000 barrels per day (bpd), to 32.68 million bpd, a Reuters survey found last week, led by cuts from top exporter Saudi Arabia.

Potentially undermining OPEC’s efforts is swelling US oil supply. US crude oil production stayed at a record 11.7 million bpd in the last week of 2018, according to weekly data by the Energy Information Administration (EIA) released on Friday.

With inputs from Reuters

Updated Date: Jan 07, 2019 13:04:12 IST