Indian basket's crude price drops under $90/barrel

The international crude oil price of the Indian basket continued falling and went below $90 a barrel on the last trading day Friday, the petroleum ministry said here.

"The price of the Indian basket was $88.23 per barrel on 10.10.2014. This was lower than the price of $90.50 per barrel on the previous day," the ministry said in a release Monday.

"Global benchmark Brent crude oil futures have fallen steadily for almost four months, dropping 23 percent from a June high of over $115 a barrel as fears of a Mideast supply disruption ebbed, US shale production boomed and demand from Europe and China showed signs of flagging," it added.

US crude stockpiles added five million barrels to 361.7 million barrels last week, according to data from the Energy Information Administration (EIA).

Crude production from the Organisation of Petroleum Exporting Countries (OPEC) averaged 30.47 million barrels per day, an increase of 402,000 barrels from the previous month, according to the OPEC monthly report released Friday.

The OPEC basket price fell more than $4 last week to $89.34, marking its fourth straight weekly drop, according to Venezuelan government figures.

Concerned about a steady drop in global oil prices, Venezuela will request an urgent meeting of the Organisation of the Petroleum Exporting Countries (OPEC), its Foreign Minister Rafael Ramirez told reporters in Caracas Friday.

On Sunday, Gulf-nation Kuwait's Petroleum Minister Ali al-Omair said output cuts by OPEC countries would do little to prop up prices in the face of higher production from Russia and the United States.

Brent crude has averaged around $103 since 2010, trading mostly between $100 and $120.

Earlier this month, the ministry said losses on diesel sales had been wiped out with the government now looking at a profit of nearly two rupees a litre on the fuel sales.

"The over-recovery on High Speed Diesel (HSD) applicable for the first fortnight of October effective 01.10.2014 is now Rs.1.90 per litre," an official release here said.

This is possibly the first time that retail prices in India are higher than global rates.

While the government is keen to pass on the benefit of cheaper oil to consumers, it is hesitant to free diesel prices just before assembly elections, an official source told IANS.