New Delhi | Jagran Business Desk: Despite weakening demand for fuel amid coronavirus pandemic, the oil prices on Thursday extended gains after Russia signalled that it was ready to cut output before a key producers meeting aimed at boosting energy markets. While Brent crude, the international benchmark of oil prices, rose 2.7 per cent to USD 33.73 per barrel, The US benchmark West Texas Intermediate jumped 4.6 per cent to USD 26.6.
Oil and Petroleum Exporting Countries (OPEC), led by Saudia Arabia and others, including Russia, will meet via video conference later Thursday. There are expectations that they will agree to reduce output to support prices.
Meanwhile, prices are at almost twenty years lows with travel restrictions amid lockdown around the world following weakening demand, Moscow and Riyadh are locked in vicious price war.
But, the world's second-biggest producer Russia and Saudi Arabia would now look set to draw a line under their dispute to help stabilise battered markets.
On Wednesday, Moscow said that it is willing to cut output by about 1.6 million barrels (or 15 per cent) per day, reported Bloomberg, smoothing a path towards deal.
There was a key question about whether US would join any deal but analysts said that a fall in US crude output forecast released earlier this week is likely enough to satisfy Moscow and Riyadh for now.
The meeting on Thursday will be followed by another key meeting on Friday when G20 energy ministers will hold talk remotely to discuss steps to steady the market.
But the analysts say that the devil will be in the details and an output cut deemed too small could send prices down even further.
According to Edward Moya, a senior market analyst with OANDA, a cut of just 10 million barrels a day "might not trigger much of rally and probably eventually see selling pressure drive crude back to the low-mid USD 20s," as quoted by AFP. He also cautioned that a "turn for the worse could happen" which derails a deal, adding that "the following 24 hours will be critical for global oil prices".
Domestically, the rise in crude oil price did not had an immediate impact on fuel prices in India as the price of petrol and diesel remained unchanged on Thursday. In Delhi, petrol was sold at Rs 69.63 per litre, while diesel was sold at Rs 62.33 per litre. Similarly, in Mumbai, petrol and diesel prices remained stagnant at Rs 76.29/ ltr and Rs 66.19/ ltr respectively.
(with agency inputs)
Posted By: James Kuanal
