Oil prices fell on Friday morning and a big fall may be seen this week. Concerns regarding supply are decreasing. That too when a cargo ship was attacked near Oman on Thursday and after that the movement of shipments through the Strait of Hormuz was stopped for some time. After that the road opened once again.
Brent crude futures fell 47 cents, or 0.62%, to $74.79 a barrel after the straight opening, while US West Texas Intermediate fell 34 cents, or 0.47%, to $71.58 a barrel.
Both benchmark contracts had surged more than 2 percent on Thursday after a cargo ship was damaged after being hit by an unidentified object near Oman. After this incident, the UN shipping agency had to stop its voluntary evacuation plan.
Iranian officials’ statement on the attack
Two US officials told Reuters that Iran fired on the cargo ship as it was trying to pass through the strait. Iranian officials said that the safety of ships passing outside the designated routes of Hormuz is not guaranteed. IG analyst Tony Sycamore said with the geopolitical risk premium rising again in prices, markets will be keeping an eye on whether tanker movements resume or whether these new disruptions force producers to put plans to increase production on hold. There is a possibility of a decline of about 7% in both Brent and WTI crude this week.
Shipment was at peak on Thursday
Thursday’s data showed that crude shipments from the Strait of Hormuz reached their highest level this week. The level is the highest since the US-Israeli conflict with Iran began in February, as the waterway reopened following a ceasefire agreement. Additionally, concerns over how long the strait would remain open also boosted trade. However, total traffic is still much lower than the daily average of 125 ships passing through the strait before the conflict began on February 28.
Effect of earthquake in Venezuela
Meanwhile, the earthquakes in Venezuela on Thursday also increased concerns about supplies. Initial assessments by workers of Venezuela’s vast oil, gas and refining infrastructure have so far revealed limited damage, as most of the country’s major production fields, refineries, pipelines and terminals are far from the worst-hit areas. Sources say the power shortage has raised doubts about whether oil production will be maintained at pre-earthquake levels—about 1.2 million barrels per day.
Petrol and diesel prices in India
However, there has been no increase in the prices of petrol and diesel in India since May 25. According to experts, the way crude oil prices are falling, it is estimated that the freeze button will remain pressed on the prices of petrol and diesel. The price of petrol and diesel in Delhi is Rs 102.12 and Rs 95.20 per liter respectively.
The price of petrol in Kolkata is Rs 113.51 and the price of diesel is Rs 99.82 per liter. In Mumbai, the prices of petrol and diesel are seen at Rs 111.21 and Rs 97.83 per liter respectively. Whereas in Chennai the price of petrol has come to Rs 107.77 and diesel to Rs 99.55 per liter. However, in the month of May, there was an increase of 7 to 8 percent in fuel prices.
