Crude oil falls on rising Covid cases in China
Premium- High fuel prices in India have pushed up inflation and impacted households. Prime minister Narendra Modi on Wednesday urged state governments to lower value added tax on petrol and diesel
NEW DELHI: Global crude oil prices fell in early deals on Thursday due to rising cases of Covid-19 in China and the consequent impact on demand.
Anticipation of restrictions in the capital Beijing has dampened market sentiment, given that key business hub of Shanghai is already in strict lockdown following a surge in covid infections.
At 1110am, the Brent June contract on the Intercontinental Exchange (ICE) was at $103.86 per barrel, down 1.39% from previous close. West Texas Intermediate futures on the NYMEX fell 1.28% to $100.71 a barrel.
Saish Sandeep Sawant Dessai, Research Associate at Angel One, said, “Prices of crude are under pressure after the recent outbreak of Covid-19 cases in the capital city of China. However, mass testing of people was being carried out at the city of Beijing in order to avert the city-wide lockdown."
Analysts believe that tight energy supplies globally, following Russia’s invasion of Ukraine and subsequent sanctions slapped on Moscow by the US and its allies, would prevent a steep fall in oil prices.
“Crude might continue to trade on a lower note given the weaker demand from the major oil-importing country, as new covid-19 cases were reported in Beijing," Dessai said.
In India, meanwhile, oil marketing companies (OMC) kept petrol and diesel rates unchanged on Thursday.
In the national capital, petrol sold for ₹105.41 per litre, while diesel costs ₹96.67 per litre. Prices were last hiked by 80 paise a litre each on 6 April. Petrol and diesel prices rose a total of Rs10 per litre each during 22 March-6 April.
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High fuel prices have pushed up inflation and impacted households. Prime minister Narendra Modi on Wednesday urged state governments to lower value added tax (VAT) on petrol and diesel.
In a virtual meeting with chief ministers of states, the prime minister said that the Centre had lowered excise duties on the fuels in November last year and had also requested states to lower their taxes.