2024-03-05 21:29:54
New Delhi: An environment of increasing crude oil prices is being created at the international level. OPEC+ members have agreed to continue oil production cuts in the second quarter. Due to this, a strengthening of crude prices was seen in the international market on Monday. OPEC+ is an organization of petroleum exporting countries and its allies. The question is whether this will also affect the prices of petrol and diesel in the domestic market before the Lok Sabha elections? It is difficult to give a complete yes or no answer to this. Since the cut in production will be effective from the second quarter. In such a situation, there may not be much impact on the domestic market. By the time crude prices become stronger, elections will have taken place.
On Monday, Brent futures rose 28 cents to around $ 83.83 per barrel in the international market. At the same time, US West Texas Intermediate (WTI) rose 20 cents to $ 80.17 per barrel.
OPEC+ decision was expected
The decision to reduce production from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) was expected. The reason is that their target is to balance the market between global economic concerns and increasing production of non-OPEC+ countries. However, Russia’s announcement to cut its oil production and exports by 4,71,000 barrels per day in collaboration with other OPEC+ countries surprised experts.
ANZ analysts said in a note that shortages in the physical market were pushing up crude oil prices. Supply has reduced due to production cuts by the OPEC+ alliance. At the same time, concerns regarding tension in the Middle East are also affecting prices.
Prices have increased due to many reasons
The ongoing conflict between Israel and Hamas and attacks by Houthi rebels in the Red Sea have boosted oil prices. The Iran-backed Houthis have vowed to continue targeting British ships in the Gulf of Aden. He did this after the sinking of the British-owned ship Rubaimar. In response, US Vice President Kamala Harris has called for an immediate six-week ceasefire with Hamas. Israel has been appealed to increase aid to Gaza.
The US is working towards a ceasefire agreement before the start of Ramadan. Ramadan is still a week away. A US official has said Israel has agreed to a framework agreement, indicating progress toward a ceasefire.