Crude Oil Drops 28% In 40 Days, When Will Petrol And Diesel Become Cheaper In India?

New Delhi: There is a continuous decline in the prices of crude oil in the international market. On Friday morning, Brent and WTI crude were seen trading almost stably, whereas till the market closed on Thursday, they had registered a slight rise. Despite this, there is currently no change in the prices of petrol and diesel in India. In the last 40 days, crude oil prices have fallen by about 28 percent, but the common consumers have not yet benefited from this.

What's going on with crude oil prices?

On Friday, Brent crude was seen trading around 71.74 dollars per barrel and US WTI crude was seen trading around 68.60 dollars per barrel. Both benchmarks declined during the week. Market experts say that investors are now keeping an eye on how much the supply of oil increases in the global market because at present there is no longer any concern about the supply as before.

Why did the market get relief from America-Iran talks?

The biggest impact on the oil market has been the ongoing talks between America and Iran. Qatar, which is playing the role of mediator, has indicated that the talks between the two countries are moving in a positive direction. Although no permanent agreement has been announced yet, as the talks progress, there is confidence in the market that there will not be a major crisis on oil supply.

Experts believe that if tensions in the region reduce further, pressure on crude oil prices may remain.

Why is the demand for oil not increasing?

Commodity market experts say that in many parts of the world the demand for oil has not increased as expected. Especially the purchase of crude oil from China still remains sluggish. On the other hand, the movement of oil through the Strait of Hormuz has started normalising, due to which the supply in the market has improved.

Saudi Arabia has also changed its strategy to increase oil sales in Asian markets. Due to this, large quantities of oil consignments are reaching the international market.

What was the impact of America's oil reserves?

According to data from the US Energy Department, crude oil stocks in the country have reached their lowest level in many years. The reason for this is said to be the increased demand from refineries. Despite this, due to sufficient supply in the global market, there was no major rise in prices.

Why did UBS reduce oil estimates?

Global investment bank UBS has lowered its future estimates for Brent crude. The bank believes that the supply of oil from the Strait of Hormuz has improved compared to before, due to which availability in the market has increased. For this reason, oil prices have been estimated below for the coming quarters.

However, some analysts believe that if excess supply reduces in the coming months and demand strengthens, then Brent crude could again reach around 80 dollars per barrel.

Why did the prices of petrol and diesel not decrease in India?

Despite the continuous decline in crude oil prices in the international market, the prices of petrol and diesel in India remain stable. Fuel prices were last changed on May 25. Since then, the rates of petrol and diesel have remained the same across the country.

At present, petrol is being sold at Rs 102.12 and diesel at Rs 95.20 per liter in Delhi. There has been no change in prices in other big cities including Mumbai, Kolkata, Chennai, Hyderabad and Bengaluru.

What could happen next?

Market experts believe that if crude oil prices remain at the current level and global conditions remain normal, then the pressure on fuel prices may reduce in the coming time. However, the final decision regarding the prices of petrol and diesel in India will be taken only on the basis of oil companies and government policy. Therefore, at present the chances of consumers getting immediate relief in prices are less.