Petrol prices were slashed for the sixth straight day while diesel rates also declined for the second consecutive day on Tuesday in major cities across the country even as crude oil edged up, buoyed by expectations of tightening global supply and production cuts.
Petrol and diesel prices declined by up to 16 paise and 11 paise respectively after the state-run oil marketing reduced the fuel prices.
After the price revisions on Tuesday, petrol in Delhi was sold at Rs 70.44 a litre, Mumbai Rs 76.08, Chennai Rs 73.11 and Kolkata Rs 72.55 per litre, according to Indian Oil Corporation website.
Similarly, diesel in Delhi was retailed at Rs 65.51 per litre, Mumbai, Rs 68.59, Chennai Rs 69.20 and Kolkata Rs 67.29 a litre.
In the beginning of the year, petrol and diesel prices in Delhi were at Rs 68.65 and Rs 62.66 per litre respectively. Petrol price had touched its lowest this year at Rs 68.29 on 5 January and diesel at Rs 62.16 on 6 January.
Meanwhile, crude oil prices edged up on Tuesday, buoyed by expectations of tightening global supply due to the US sanctions on Venezuela and production cuts led by Organisation of the Petroleum Exporting Countries (OPEC).
But disappointing US factory data weighed on the market, which on Monday saw US West Texas Intermediate (WTI) and Brent crude reach 2019 highs, as concern about the global economy persisted.
WTI futures were at $54.65 per barrel, up 9 cents or 0.16 percent. They touched their highest level in more than two months at $55.75 the previous day.
Analysts said US sanctions on Venezuela had focused market attention on tighter global supplies.
“Fresh US sanctions on the country could see 0.5-1 percent of global supply curtailed,” said Vivek Dhar, mining and energy analyst at Commonwealth Bank of Australia.
The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to but slightly less extensive than those imposed on Iran last year, experts said on Friday after looking at details posted by the treasury department.
A flotilla loaded with about 7 million barrels of Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest US sanctions and others whose buyers are weighing whom to pay, according to traders, shippers and Refinitiv Eikon data.
Meanwhile, oil supply from the OPEC fell in January by the largest amount in two years, a Reuters survey found. Saudi Arabia and its Gulf allies over-delivered on the group’s supply-cutting pact while Iran, Libya and Venezuela registered involuntary declines.
Russia is fully complying with its pledge to cut oil production gradually, Russian Energy Minister Alexander Novak said on Monday, adding that production fell by 47,000 barrels per day in January from October.
Weighing on oil markets, US government data showed new orders for US-made goods unexpectedly fell in November, with sharp declines in demand for machinery and electrical equipment.
The global economic outlook and prospects for growth in fuel demand have been clouded by poor economic data in China and US-China trade tensions.
US President Donald Trump last week said he would meet his Chinese counterpart Xi Jinping in coming weeks to try to settle the two countries’ dispute.
— With Reuters inputs
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Updated Date: Feb 05, 2019 16:01:34 IST