Indian crude oil basket at 11-year low, amid global glut
New Delhi, Dec 8 (IANS) The Indian basket of crude oils fell to a 11-year low of $38.61 per barrel, after the decision by the global cartel to continue pumping the hydrocarbon at existing levels despite a glut, official data showed on Tuesday.
As per data released by India’s petroleum ministry, its crude basket fell below the $40-mark per barrel mark for the second time in a month on Monday, following a decision by the Organisation of Petroleum Exporting Countries (OPEC) to keep producing optimally.
The Indian basket, comprising 73 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, plunged to $38.61 on Monday for a barrel of nearly 160 litres, as per data compiled by the state-run Petroleum Planning and Analysis Cell.
As per latest OPEC data, its new reference basket of 12 crude oils closed at $38.08 a barrel on Friday. With the OPEC strategy designed to choke competition from the American shale gas industry, US light crude dropped by $2 on Monday to less than $38 a barrel.
In November, global price had gone below the $40-mark for the first time in 11 years. Now, the Indian basket is ruling at the lowest level since July 2004 — a development that could impact the Indian currency.
“The OPEC decision could probably support Indian rupee in the short term, which has been under relentless pressure from foreign institutional investors who have consistently been net sellers in Indian equities lately,” said analyst Anand James of Geojit BNP Paribas.
Oil prices have been under pressure for several months due to concerns over oversupply, but the slump has deepened in the recent period.
Crude-oil production has remained robust despite the large drop in prices in the last year, as US producers continue to cut costs and OPEC members keep producing at full tilt.
The November drop below $40, after having been in the $43-47 range earlier, was attributed to uncertainties created by the terror attacks in France last month.
Oil prices have fallen by more than 50 percent in a little over a year from levels of well over $100 a barrel, provoked by the slowdown in China and other emerging market economies and the end of sanctions against Iran.
This led to Indian oil and gas, energy and power companies stocks fell on Monday after the dip in global crude oil prices. The benchmark sensitive index (Sensex) of the Bombay Stock Exchange also fell 219.78 points, or 0.86 percent, due to this.