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Brent at 6-month low as US stocks rise, OPEC+ to hike output

US crude oil inventories had risen unexpectedly last week as exports fell and refiners lowered runs. Gasoline stocks had also increased amid slowing demand, as per the Energy Information Administration. (File Photo: Hindustan Times)Premium
US crude oil inventories had risen unexpectedly last week as exports fell and refiners lowered runs. Gasoline stocks had also increased amid slowing demand, as per the Energy Information Administration. (File Photo: Hindustan Times)

The fall in crude oil prices bodes well for India as the country imports 85% of its energy requirements.India has been making efforts to diversify its oil sourcing amid the Russia-Ukraine conflict and the supply risks it has posed

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NEW DELHI: Crude oil prices were under pressure on Thursday following a rise in US crude oil inventories and the decision of OPEC and allies to raise output by 100,000 barrel a day in September.

Around 1230pm, the Brent September on the Intercontinental Exchange was at $96.78 per barrel, the lowest since 21 February. The September contract of West Texas Intermediate (WTI) on NYMEX was at $90.67 per barrel, having settled in the previous session at $90.66, the lowest since 10 February.

US crude oil inventories had risen unexpectedly last week as exports fell and refiners lowered runs. Gasoline stocks had also increased amid slowing demand, as per the Energy Information Administration.

US crude stocks rose 4.5 million barrels last week, compared with an expected draw of 600,000 barrels.

A less than expected hike in output by Opec and allies, however, supported prices, analysts said.

“...supporting price are tightness concerns amid reduced supply from Russia and OPEC’s decision to raise production marginally," said Ravindra Rao, head of commodity research at Kotak Securities.

The fall in crude oil prices bodes well for India as the country imports 85% of its energy requirements.

India has been making efforts to diversify its oil sourcing amid the Russia-Ukraine conflict and the supply risks it has posed.

Last week, the Union cabinet approved an additional investment of $1.6 billion by Bharat Petro Resources Ltd, a fully-owned unit of state-run BPCL, for the development of a Brazilian oil block.

According to S&P Global Commodity Insights the investment of $1.6 billion in a project in Brazil for equity oil highlights the strategic interest of India to look for pockets of opportunities overseas, and New Delhi is now keen to explore such opportunities in other Latin American countries as well.

“Besides expanding strategic petroleum reserves and diversifying its crude supply sources, the government is making effort to bring oil from overseas equity assets in the event of a supply disruption," said Lim Jit Yang, advisor for Asia-Pacific oil markets at Platts Analytics.

“Supply security is becoming more important as global spare capacity has been uncomfortably low. In addition, India’s ageing oil wells are struggling to keep their domestic oil production steady amid growing oil demand," he added.

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