Oil prices extended their losses into a third day on Thursday as a surprise build-up in U.S. crude inventories and a resurgence of COVID-19 cases in India and Japan fuelled fears that a recovery in global economy and fuel demand may be stalled. Brent crude futures fell 18 cents, or 0.3%, to $65.14 a barrel by 0721 GMT, following a drop of $1.25 on Wednesday. U.S. West Texas Intermediate (WTI) crude futures were down 17 cents, or 0.3%, at $61.18 a barrel, after losing $1.32 on Wednesday. Both contracts dropped more than 2% on Wednesday, closing at their lowest since April 13. They are down about 3% so far this week.
Petrol and diesel prices may increase soon at the end of the ongoing Assembly elections with oil companies looking to raise the retail price of the two auto fuels between Rs 2 and Rs 3 per litre in phases and make up for the losses they incurred by keeping the prices at artificially low levels in the run up to the local elections. Government sources said that oil companies are making losses to the tune of Rs 3 and Rs 2 per litre on sale of petrol and diesel, respectively, due to rise in global crude prices that also impacted the international product prices.
Oil prices were lower on Monday as rising coronavirus infections in India and other countries prompted concerns that stronger measures to contain the pandemic will hit economic activity, along with demand for commodities such as crude. Brent crude was down 17 cents, or 0.3%, at $66.60 a barrel by 0643 GMT, after rising 6% last week. West Texas Intermediate (WTI) U.S. oil was down 10 cents, or 0.2%, at $63.03 a barrel, having gained 6.4% last week. The progress of vaccination drives in the developed markets can be seen in road traffic levels, but resurging case numbers have reversed the recovery in the emerging countries, such as India and Brazil, ANZ Research said in a report on Monday.
Jet fuel price on Friday was cut by 1 per cent, the second reduction in rates this month following softening international crude oil prices. Aviation turbine fuel (ATF) price was reduced by Rs 568.88 per kilolitre, or 0.9 per cent, to Rs 57,805.28 per kl in the national capital, according to a price notification of state-owned fuel retailers. This is the second reduction in rates this month. Earlier, prices were cut by 3 per cent on April 1. These price cuts were the first in six months. Meanwhile, petrol and diesel prices remained unchanged after the fourth reduction in three weeks on Thursday. Petrol price on Thursday was cut by 16 paise per litre and diesel by 14 paise.
Oil prices rose on Thursday to the highest level in nearly a month, after jumping 5% in the previous session, driven by increased demand forecasts from the International Energy Agency (IEA) and OPEC as major economies recover from the pandemic. Brent crude was up by 16 cents at $66.74 a barrel by 0659 GMT, after reaching $66.94 earlier, the highest since March 18, and gaining 4.6% on Wednesday. U.S. West Texas Intermediate futures rose 12 cents to $63.27 a barrel, earlier rising to $63.48, also the highest since March 18. The contract rose 4.9% in the previous session. Supply discipline and rebounding economies are set to give oil a chance to break out of the recent range, Goldman Sachs analysts said in a report.