Indian crude basket gains $2/barrel overnight as oil prices rise

New Delhi/New York, March 18 (IANS) In line with a major recovery in international crude oil prices, the Indian basket of crude oils gained nearly $2 a barrel overnight with global rates climbing back over $40 as a declining dollar made crude less expensive and more attractive for buyers holding other currencies.

According to official data, the Indian basket of crude oils, composed of 73 percent sour grade Dubai and Oman crudes and the rest by sweet grade UK Brent, closed trade on the previous day on Thursday at $38.05 per barrel of 159 litres, as compared to Wednesday’s closing price of $36.10.

State-run Indian Oil Corp announced a big hike in transport fuel rates from Thursday, increasing petrol by Rs.3.07 a litre and diesel by Rs.1.90 — both at Delhi, with corresponding increase in other states, saying the hardening of global crude oil rates warranted such an increase.

The US dollar decreased against other major currencies on Thursday, the fall provoked by the Federal Reserve’s earlier dovish statement on raising its interest rate.

US West Texas Intermediate crude was up 3 cents at $40.23 barrel, while Brent crude up 2 cents at $41.56 in early trade on Friday.

Prospects of an output freeze by major producuing countries, to deal with the oil supply glut that had pushed prices to $25-levels earlier this year, has driven the recent prices rally.

Declining American output also buoyed the market. Crude production of the country lost 10,000 to 9.068 million barrels a day last week, according to the weekly report of the Energy Information Administration (EIA) released Wednesday.

US crude stockpiles increased less than expected. Crude supplies last week gained 1.3 million barrels to 523.2 million barrels, 64.7 million barrels more than one year before, according to EIA.

In February, the Organization of Petroleum Exporting Countries’ (OPEC) crude production decreased by 175,000 barrels to average 32.28 million barrels per day, the cartel said in a report released earlier this week.

Saudi Arabia and Russia announced in mid-February that they would halt production increases as long as other major producers followed suit.

Reiterating its intent to improve current oil prices, OPEC also said: “If there is a willingness to face the oil industry’s challenges together then the prospects for the future have to be a lot better.”

A meeting proposed by the two countries in the Qatari capital, Doha, to discuss the production freeze has been postponed to April from March 20.

OPEC member Iran, however, reportedly said earlier this week that it intended to step up its production back to the pre-sanction levels of 4 million barrels a day.

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