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Business News/ Markets / Commodities/  Oil prices down 2% as demand concerns outweighs OPEC cuts; Brent dips to $84/bbl
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Oil prices down 2% as demand concerns outweighs OPEC cuts; Brent dips to $84/bbl

Brent futures fell $1.62, or 1.9 per cent, to $84.19. US West Texas Intermediate crude futures were $1.55 cents, or 1.8 per cent, lower at $82.73.

FILE PHOTO: REUTERS/Alexander Manzyuk/File Photo (REUTERS)Premium
FILE PHOTO: REUTERS/Alexander Manzyuk/File Photo (REUTERS)

Oil prices declined 2 per cent on Thursday, October 5, extending the previous session's nearly 6 per cent losses, as an uncertain demand outlook overshadowed an OPEC decision to maintain oil output cuts, keeping supply tight. Oil settled more than $5 lower on Wednesday - its biggest daily drop in over a year even after a meeting of a ministerial panel of the Organization of the Petroleum Exporting Countries and allies (OPEC+).

Global benchmark Brent crude futures have declined about $10 a barrel in less than 10 days after edging close to $100 in late September. The combined percentage drop over the last two days was the steepest since May for both crude benchmarks. Brent futures fell $1.62, or 1.9 per cent, to $84.19. US West Texas Intermediate crude futures were $1.55 cents, or 1.8 per cent, lower at $82.73, according to news agency Reuters.

Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a October 19 expiry, was trading 2.39 per cent lower at 6,895 per bbl, having swung between 6,867 and 7,090 per bbl during the session so far, against a previous close of 7,064 per barrel.

Also Read: RBI Monetary Policy: Will high crude oil prices impact MPC's decision on October 6?

‘’WTI Crude oil plunged more than 5 per cent on Wednesday and closed at a five-week low of $84.22 per bbl, amid lingering demand concerns. EIA inventory data showed that US gasoline demand has plummeted to its lowest seasonal level in 25 years, as sky-high prices sparked a pullback in consumption,'' said Ravindra Rao, CMT, EPAT, VP-Head Commodity Research, Kotak Securities.

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OPEC made no changes to the group's oil output policy, and Saudi Arabia said it would maintain a voluntary cut of 1 million barrels per day (bpd) until the end of 2023, while Russia would keep a 300,000 bpd voluntary export curb until the end of December.

Earlier this week, oil Minister Hardeep Puri told Bloomberg TV that oil prices need to fall to levels of around $80 a barrel to be good for the economy. The world’s third biggest oil user is constantly telling oil producing nations that crude is too costly, according to Bloomberg.

 

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Published: 05 Oct 2023, 10:39 PM IST
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