Oil prices down 2% as demand concerns outweighs OPEC cuts; Brent dips to $84/bbl
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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Updated: 05 Oct 2023, 10:39 PM IST
