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NEW DELHI: Crude oil prices were mixed in choppy trade in early deals on Monday. Investors awaited the outcome of a meeting of leaders of the Group of Seven (G7) nations in Germany on Russian oil and gas exports. Demand concerns over slowing economic activity and prospects of a global recession weighed on prices.
At 1035 am, the August Brent crude contract on the Intercontinental Exchange was at $113.17 a barrel, up 0.04% from its previous close. The August contract of West Texas Intermediate was down 0.06% at $107.56 per barrel.
The prospect of more supply tightness loomed over the market as western governments sought ways to cut Russia's ability to fund its war in Ukraine, even though G7 leaders were also expected discuss a revival of the Iran nuclear deal - which might lead to more Iranian oil exports.
“However, weighing on crude oil prices are demand concerns as economic activity is slowing while aggressive monetary tightening has fueled debate about a recession. Crude oil may remain in a range as supply risks counter demand worries however with increasing focus on global growth, demand concerns may keep pressure on prices," said Ravindra Rao, head of commodity research at Kotak Securities.
Rahul Kalantri, vice president for commodities at Mehta Equities Ltd., said global supply concerns due to the Russia-Ukraine crisis and lower than expected outputs from the OPEC+ nations are supporting crude oil prices at lower levels.
Meanwhile, domestic retail fuel prices have remained steady for over five weeks now. In the national capital, petrol sold for ₹96.72 per litre and diesel was priced at ₹89.62 a litre.
Experts said that the absence of revision in petrol and diesel prices despite fluctuating global oil prices would impact the financials of Indian oil marketing companies.
Moody’s Investors Service has said that the financial performance of India’s state-owned refining and marketing companies, Bharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd. and Indian Oil Corp. will remain weak so long as their net realised prices for gasoline and gasoil are lower than international prices.
“Nonetheless, we do not expect this situation to be sustained. We expect that the Indian government will eventually allow fuel retailers to adjust selling prices, but the price increases will be implemented gradually," it said