Volatility in oil prices, uncertain petroleum demand impacting Indian OMCs

An output cut, at best, will put a floor to the falling crude prices, but it may not stabilise demand-supply dynamics.

Volatility in crude oil prices and an uncertain petroleum demand over the last fortnight have come as a cause for concern for oil marketing companies (OMCs).

“Crude prices had rallied 25 per cent on Thursday after Saudi Arabia called an 'urgent meeting' of the OPEC+ alliance and other producers to negotiate an output cut deal. NYMEX front-month crude settled at $25.32 per barrel, up $5.01,” S&P Platts noted in a report on Friday.

US President Donald Trump had on Thursday indicated a production cut agreement of 10 million barrel per day to 15 million barrel per day. “Despite the sudden jump in