Oil drops again to $50 a barrel

In a repeat of the plunge at the turn of the year, global crude oil prices again fell to the psychological $50 mark, from over $100 last year, this time in the wake of the Iran nuclear deal last month.

The basket of 12 crude oils of the Organisation of Petroleum Exporting Countries (OPEC) closed at $50.50 a barrel of nearly 160 litres on the previous trading day on Friday.

The Indian basket of crude oil fell on Friday to $52.98 a barrel.

The International Energy Agency has said that Iran has at least 17 million barrels of crude oil stored and ready to be shipped.

This would add to the output from OPEC whose production levels are already at a three-year high, at a time when the market remains over-supplied.

Saudi Arabia reported a record crude oil production of 10.6 million barrels per day (bpd) in June, an increase of ore than 200,000 bpd on the previous month.

Oil marketer Indian Oil Corp on Friday cut prices of transport fuels - petrol by Rs.2.43 a litre and diesel by Rs.3.60 - for the third time in the month. Petrol and diesel prices were last cut on July 15 by Rs.2 a litre each.

The price of petrol per litre is Rs.66.90 in Delhi, Rs.71.57 in Kolkata, Rs.71.97 in Mumbai and Rs.67.29 in Chennai. Diesel costs Rs.49.72 a litre in Delhi, Rs.52.75 in Kolkata, Rs.55.15 in Mumbai and Rs.51.08 in Chennai.

Meanwhile a finance ministry source told IANS on Monday that it will pay state-run oil marketers Rs.1,300 crore cash subsidy for kerosene for the first quarter ended June.

The subsidy payout on kerosene, to compensate retailers for the under-recovery or loss, incurred by selling below cost, will be at Rs.12 per litre, as per a new formula approved by the government, the source said.