Hyderabad: Brent crude fell to a fresh four-year low on Friday, after Opec decided against cutting output despite a supply glut. This news could well be music to the ears of Indians as it could further lower their expenditure on fuel. Brent crude touched a low of $71.12 a barrel after settling at a four-year closing low on Thursday, when Saudi Arabia blocked calls from poorer members of the Opec oil cartel to cut production to stem a slide in global prices.
The international crude oil price of Indian Basket as compuPted/published on Friday by the ministry of petroleum and natural gas is $72.51 per barrel (bbl), which is nearly $3.5 lower than its Thursday’s price.Falling oil price is good news for India, which imports 80 per cent of its requirements. It may also lead to oil companies lower petrol and diesel prices during their fortnightly review.The prices were last cut on October 31.
Petrol prices have fallen sharply from nearly Rs74 per litre to Rs 64 per litre (in Delhi) and Rs71.91 (in Mumbai) since June. If this trend continues, experts claim that petrol price come down Rs 60 a litre.Taking cue from the global crude oil movements, domestic stocks related to oil like oil marketing companies, airlines, paint makers attracted heavy buying interest.
Shares of HPCL zoomed 8.93 per cent to settle at Rs 596.75 and IOC gained 4.42 per cent to Rs364.70 on the BSE. Similarly, the shares of BPCL jumped 3.58 per cent to Rs 745.85 apiece.Some global experts, however, worry about its effect on Japan and European Union, which are struggling to get back on the path of economic growth.
“Whatever positive connotations energy (prices) might have for growth, the extent and pace of the decline in oil seems the more worrying factor for the moment,” said Michael Turner, a strategist with RBC Capital Markets.The fall in the oil price has also been causing concern for several poor oil producing countries, which require the oil price to be above $80 a barrel.According to some estimates, countries like Saudi Arabia, Venezuela, Iran and Libya need petrol price to rise over $100 a barrel to present a deficit-free national budget.
