Covid Resurgence and OPEC’s Rising Supply Could Help India, Auto News, ET Auto
New Delhi: Fuel consumers could get some respite from rising gasoline and diesel prices as the global oil scenario is expected to ease in the coming days as OPEC oil cartel concludes an agreement to increase production to meet growing demand.
The increase in Covid cases around the world has made the oil market uncertain as it has the potential to quickly erode demand.
Benchmark Brent crude fell 3% to around $ 73 a barrel, while U.S. crude fell around 4% to around $ 71 a barrel.
This month’s drop came after crude had fallen over the previous eight months as the global economy recovered from the pandemic.
Sources said that after disputes between Saudi Arabia and the United Arab Emirates earlier postponed a deal with OPEC on production cuts, it is becoming increasingly clear that OPEC + is moving closer. an agreement that would offer him better conditions and allow the cartel to increase its production in the months to come. .
OPEC production in June increased from 590,000 bpd to 26.03 million bpd. In July, production increased again and could increase further next month.
If this happens and cases of the Delta variant of Covid continue to rise around the world, there could be additional pressure on oil which could see a drop from current levels in the months to come.
As the situation evolves, analysts expect oil prices to drop below $ 70 a barrel soon. Brent crude is currently hovering at $ 73.59 per barrel.
“The situation on the world oil markets seems favorable for a drop in oil prices in the coming days. It would be positive for India which can not only reduce the growing bill of its imports, but also control the increase in prices. fuel, ”said an oil expert who did not want to be named.