There has been a 23 percent decline in crude oil prices in a month.
There is a continuous decline in the prices of crude oil in foreign markets. Even on Tuesday, after the market closed, the prices of crude oil closed with a decline of one percent. If we talk about the last one month, a decline of 23 percent has been seen in the prices of crude oil.
This means that since the last time fuel prices in the country increased, the prices of Gulf and American crude have seen a decline of more than $20 per barrel. Reuters report claims that at present the prices of crude oil have fallen to the lowest level in about 4 months. This means that prices are approaching pre-war levels. Which is considered a very good sign for the global economy.
In fact, tensions between America and Iran have reduced considerably. America has given Iran a license to sell its oil for the next two months. Besides, the possibilities of opening of the Strait of Hormuz have also increased. Apart from this, Gulf countries have also agreed to increase supply and production. The effect of which is visible in the prices of crude oil.
By the way, it is known that an immediate relief is going on. There are still some points in the talks between Iran and the US on which there are deep clouds of uncertainty. Let us also tell you what kind of story the crude oil price figures are telling.
Crude oil fell 23 percent in a month
There has been a decline of 23 percent in the prices of crude oil in the international market in the last one month. If we look at the data, the price of Brent crude oil from Gulf countries was at $99.58 per barrel on May 26. Which has come below 76 dollars per barrel. During the trading session on June 24, the price of crude oil appeared at $ 75.97 per barrel.
This means that during this period there has been a decline of $ 23.61 per barrel in the price of crude oil. Brent crude was last seen at the level of 75.75 on March 2. This means that prices have reached their lowest level in about 4 months.
On the other hand, a big decline has been seen in the price of American crude WTI. If we talk about June 24, a decline of 0.57 percent is seen in the price of crude oil and has reached 72.73, whereas during the trading session it had reached 72.36 dollars per barrel.
On May 26, the price of crude oil was seen at $93.89 per barrel. Since then, the price of American crude has seen a decline of about 23 percent. On March 3, American oil appeared at the level of $70. WTI is also seen at its lowest level in almost 4 months.
Why did crude oil prices fall?
- On Monday, prices fell 3% and continued the trend after Iran received a 60-day sanctions relief from the US following initial peace talks and reports of a reduction in fighting in Lebanon under a major agreement.
- On Tuesday, Oman and Iran agreed to continue talks on the future management of navigation in the Strait of Hormuz. US Secretary of State Marco Rubio said on Tuesday that under any final agreement with the US, Iran would not be able to collect tolls on this important waterway, because such an arrangement would violate international law.
- Due to the closure of this strait (which accounts for about one-fifth of the world’s oil and LNG supply) for more than three months due to the Iran War, the world has lost millions of barrels of oil and gas supply. In the worst-case scenario, more than 14 million barrels per day (bpd) of oil production was shut down, or about 14 percent of world demand, according to the International Energy Agency.
- Investors are now carefully watching how quickly Middle East producers can resume oil production and exports after damage caused by the war, and whether more ships will come to the region.
- An Iranian military source told Fars news agency that a limited number of ships are being allowed to pass through the strait every day in coordination with Iran’s Revolutionary Guards Navy.
- Additionally, ship-tracking data showed that three stranded supertankers passed through the strait on Tuesday, while seven empty liquefied natural gas (LNG) tankers bound for Qatar have entered it in recent weeks.
- The UN shipping agency said an evacuation plan is underway to enable hundreds of ships carrying 11,000 sailors stranded in the Gulf following the US-Iran ceasefire agreement to pass through the strait.
- US President Donald Trump said 19 million barrels of oil came out of the Strait on Monday, and pointed to falling oil prices in a social media post on Tuesday.
- Still, Ole Hvalby, market analyst at SEB Research, said that in the short term, the easing of sanctions will not have much impact on prices, as the US-Iran memorandum of understanding is still new and fragile.
mines in the strait
Tomas Varga, an analyst at PVM Oil Associates, said shipowners and operators need reassurance that the threat from mines has been completely eliminated. Damaged ports, debris in the water and congestion create additional obstacles to the unimpeded growth of traffic.
Iraq has increased output from its southern oil fields to about 2.1 million barrels per day (bpd) as more tankers queue up at Gulf export terminals, two Iraqi oil officials told Reuters.
On the other hand, the increase in supply was not uniform: According to data from the Joint Organization’s Data Initiative, crude oil exports to Saudi Arabia, OPEC’s biggest exporter, fell for the second consecutive month in April to a record low.
Preliminary survey by Reuters has shown that the stocks of crude oil, gasoline and diesel have decreased in America last week. This has happened when the Energy Department said last week that the stock of crude oil in America’s Strategic Petroleum Reserve has fallen to its lowest level since June 1983.
Energy consultancy Gelber & Associates wrote in a note that although the rapid liquidation of speculative ‘long positions’ has brought prices down from their previous highs, the historically low level of the US Strategic Petroleum Reserve will provide a strong structural floor to the market in the coming weeks.
When will petrol and diesel become cheaper in India?
After the huge fall in the prices of crude oil, now the question is being raised that when will we see a reduction in the prices of petrol and diesel. The special thing is that the reduction in the prices of crude oil has come after the increase in the prices of petrol and diesel in India by about 7.5 percent in May.
On May 25, oil companies last increased the prices of petrol and diesel. Since then, the companies have pressed the freeze button on fuel prices. After many years, the price of petrol in Delhi had crossed Rs 100 per liter. In such a situation, after the decline in crude oil prices, there are rumors of reduction in fuel prices.
According to experts, there will be no reduction in the prices of petrol and diesel until the losses of the petroleum companies are compensated. Recently, the statement of Petroleum Minister Hardeep Singh Puri was revealed, when he had said that once cheap crude oil starts arriving in the country’s refineries, the relief will be transferred to the common people.
Petrol and diesel prices in the country
However, there has been no increase in the prices of petrol and diesel in India for about 30 days. If experts are to be believed, 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.
