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At $76.43 a barrel, Indian basket of crude oil rises highest since Dec 2014

In the month of March, India's oil demand rose by a strong 335 kb/d, contributing to a growth of 360 kb/d in the first quarter.

Shine Jacob  |  New Delhi 

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On a day when the Indian basket of touched its three-and-a-half year high of $76.31 a barrel, the (IEA) said in a report that following a growth of 125 kilo barrels per day in 2017, India will see an acceleration in oil demand to 300 kb/d in 2018. This is despite a drop in global demand for oil.

On Wednesday, the Indian basket price touched its highest point since December 1, 2014, when it was seen at $76.43 a barrel. However, since the rupee value against dollar is much depreciated since then, the impact on India's trade balance would be higher. The rupee is at 67.53 a dollar currently against Rs 61.80 on December 1, 2014.

However, India could expect some moderation in global prices if the global demand falls in the second half of 2018, according to

In the month of March, India’s oil demand rose by a strong 335 kb/d, contributing to a growth of 360 kb/d in the first quarter. A very strong increase in gasoil deliveries (150 kb/d) is primarily responsible, the report said. On the back of Pradhan Mantri Ujjwala Yojana, the demand for liquefied petroleum gas also grew by 55 kbd during the first quarter.

“All the factors that contributed to a slowdown in 2017 are now behind us e.g. demonetisation, the imposition of the Goods and Service Tax (GST), and the IMF forecasts a rebound in economic growth in 2018 to 7.4 per cent,” the report said. On the other hand, global oil demand growth for 2018 has been revised slightly downwards from 1.5 million barrels per day (mb/d) to 1.4 mb/d. “Kerosene demand declined slightly during the quarter, as heating grades were replaced by LPG, while jet fuel received support from booming air transport.

India continues to post global records in domestic air traffic growth: after rising by 23 per cent in February, Indian revenue passenger kilometers rose by 28 per cent in March. Gasoline demand also posted strong growth of 75 kb/d in the first quarter on robust car sales,” IEA said.

It added that on the back of higher prices, the growth is expected to slow down during the second quarter of the year. World oil demand is expected to average 99.2 mb/d in 2018. Meanwhile, global oil supplies held steady in April at close to 98 mb/d.

Meanwhile, production eased by 130 kb/d in April to 31.65 mb/d, on further declines in Venezuela and lower output in Africa. “Compliance with the Vienna Agreement reached a record 172%. The call on and stocks will average around 32.25 mb/d for the remainder of 2018, nearly 0.6 mb/d higher than April output,” the report added.

While global refining throughput is on the rise with runs expected to hit a record 83 mb/d in July-August. Indian throughput fell below 5 mb/d in March, declining 250 kb/d month-on-month on refinery maintenance, which is also expected to be reflected in April data. Interestingly, Brent crude prices was seen at $77.95 a barrel at one point today.

  • Indian Basket of touched $76.31 a barrel (Exchange Rate: Rs 67.53 per dollar) in last closing Tuesday
  • Highest since December 2014, when it was $76.43 a barrel ( Exchange Rate: Rs 61.80 per dollar)

First Published: Thu, May 17 2018. 00:48 IST
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