Oil prices

Lower supplies as well as hostilities between Russia and Ukraine pushed Brent crude oil price to nearly an 8-year high on Wednesday. Besides, robust global demand is expected to keep the Brent-index crude oil price high.

The 31 member countries of the governing board of the International Energy Agency (IEA) on Tuesday agreed to release 60 million barrels of oil from their emergency reserves to send a unified and strong message to global oil markets that there will be no shortfall in supplies as a result of Russia's invasion of Ukraine.The extraordinary governing board meeting, held at the ministerial level, was chaired by US Secretary of Energy, Jennifer Granholm, in her capacity as the chair of this year's IEA ministerial meeting.

The rise in crude oil prices comes after negotiations failed to resolve the Russian-Ukrainian conflict. The Brent-indexed crude oil prices had risen by 5 per cent to over $98 per barrel on Monday. Russia is the third largest producer of crude oil in the world. It is feared that sanctions against Russia will start to curtail global supplies and stifle growth.

As per Ministry of Petroleum & Natural Gas: "India is also committed to supporting initiatives for releases from 'Strategic Petroleum Reserves', for mitigating market volatility and calming the rise in crude oil prices." Besides, the Ministry said that India is closely monitoring global energy markets as well as potential energy supply disruptions on the back of evolving geopolitical situation.

According to the ratings agency, the lagged revision in RSPs (retail selling prices) of MS (motor spirit) and HSD (high speed diesel) is warranted by current surge in crude prices at Rs 6-8 per litre. "The impact of the latter on RSPs and the CPI inflation can be absorbed by a roll back in excise duties on these fuels to pre-pandemic levels," ICRA Chief Economist Aditi Nayar said.

The price movement comes a day after the Russia-Ukraine war pushed Brent Crude Oil prices to $105 per barrel. Besides, Thursday was the first time since 2014 that crude oil prices crossed the $100 per barrel mark. On the NYMEX WTI index, crude oil prices surged by 5.50 per cent near $97.22 per barrel. Currently, Russia is one of the world's top producers of crude oil and any western sanctions against the country will stiffen the global supply.

The West Texas Intermediate for April delivery added 71 cents to settle at $92.81 a barrel on the New York Mercantile Exchange, after hitting a session high of $100.54. Brent crude for April delivery increased $2.24 to close at $99.08 a barrel on the London ICE Futures Exchange, after touching $105.77 earlier in the session.

On Thursday, Russian President Vladimir Putin announced a military operation in Ukraine. Besides, crude oil prices surged by 5.50 per cent near 97.22 per barrel on the NYMEX WTI index. Notably, Russia is one of the world's top producers of crude oil and any western sanctions against Russia will stiffen the global supply.

India is exposed on both inflation and current account fronts, Thailand is exposed via its current account but relatively less so on inflation, and in contrast, South Korea is exposed on inflation but not current account deficit. The Indian government could consider a reduction in fuel excise duty cut (Rs 5-10/lt).

The West Texas Intermediate for March delivery added 1.28 dollars, or 1.4 per cent, to settle at 92.35 dollars a barrel on the New York Mercantile Exchange, on its expiration day. Brent crude for April delivery increased 1.45 dollars, or 1.5 per cent, to close at 96.84 dollars a barrel on the London ICE Futures Exchange. The front-month contract of the international benchmark notched its highest finish since September 29, 2014, according to Dow Jones Market Data.