Covid-19 surge halts crude rally; Indian OMCs still likely to hike prices post polls

A week-long rally in the price of crude oil has been stalled by rising Covid-19 infections with Brent crude falling about 0.5 per cent to $66.5 per barrel on Monday.

Brent crude had risen from $62.15 on April 5 to about $67 per barrel on April 15 as the demand for oil strengthened as US and Chinese economies started showing signs of economic recovery.

We examine the recent trend in crude oil prices and its impact on India.

What caused the rally in crude oil prices?

New government data in the US pointing to lower unemployment claims and rising retails sales coupled with China posting an 18.3 per cent GDP growth in the quarter ending March raised the demand outlook for crude oil boosting prices. New economic sanctions on Russia by the US had also helped push up prices according to experts as they raised the issue uncertainty in trade with Russia.

What is curbing the rally?

A sharp spike in Covid-19 infections in India and Brazil as well as in some major European countries has negatively impacted the demand outlook for crude oil.