Crude Oil Prices Witness a Sharp Decline
The global crude oil market has seen a significant dip, with Brent crude oil prices falling below $70 per barrel. This marks the first time since October that oil prices have dropped by more than 2%. The decline is primarily attributed to weak demand in international markets. Experts suggest that further reductions in crude oil prices are likely, which could result in lower petrol and diesel prices in India.
On Wednesday, the downward trend in crude oil prices continued. Brent crude futures dropped by 0.3%, reaching $70.80 per barrel, while US West Texas Intermediate (WTI) crude saw a decline of 0.9%, settling at $67.68 per barrel. According to MK Global Financial Services, this fall in crude oil prices could benefit India’s oil marketing companies (OMCs).
Key Indicators Suggesting Further Decline in Crude Oil Prices
Several global factors indicate that crude oil prices may decrease further in the near future. The three primary reasons behind this trend are:
1. Possible Relaxation of Sanctions on Russia
The United States is currently focusing on resolving the ongoing Russia-Ukraine conflict. As part of these efforts, the US may consider easing some of the sanctions imposed on Russia. Reports suggest that the US Foreign and Finance Ministries have been instructed to review the existing restrictions and identify areas where Russia could be granted relief. If this happens, Russia’s oil supply to the global market may increase, leading to a further drop in crude oil prices.
2. OPEC+ Plans to Boost Oil Production
OPEC+ has announced its decision to increase oil production. According to a report by Reuters, the group will raise its oil output by 138,000 barrels per day in April. This marks the first increase in oil production since 2022. The move comes in response to pressure from the US, particularly former President Donald Trump, who urged OPEC and Saudi Arabia to take measures to lower oil prices.
3. Tariffs Imposed by Donald Trump May Affect Global Demand
Donald Trump has announced a 25% tariff on imports from Canada and Mexico. Industry experts believe that these tariffs could impact global economic activity and reduce fuel demand. Consequently, this could put additional pressure on oil prices, potentially causing further declines.
Will Petrol and Diesel Prices in India Decrease?
With crude oil prices falling, there is speculation that Indian oil companies may respond by adjusting fuel prices. As the global market continues to show signs of further reductions in crude oil prices, expectations are rising that petrol and diesel prices in India may also decrease. A significant drop in fuel prices could help control inflation, providing relief to consumers and businesses alike.
