Finance1 min read

Oil price decline lifts mood, but volatility remains high

By · Via Times of India · Published by Everything Blog

In short

Brent dipped beneath the $94 mark before recovering to settle at $97.7 per barrel, tracking market reactions to the US midterm election results. Indian purchasing costs similarly dropped to a two-month low of $103.8 per barrel following targeted transit exemptions granted by Iranian authorities in the Strait of Hormuz. Although consumers will not see immediate price cuts at the pump, ICRA noted that sustained lower global prices could limit retail fuel hikes and help keep projected FY2027 CPI inflation near 5.2%.

Key points

  • Global benchmark prices remain approximately 70% higher this year amid ongoing Persian Gu…: Global benchmark prices remain approximately 70% higher this year amid ongoing Persian Gulf supply disruptions.
  • Temporary price declines provide relief to oil marketing companies that incurred losses o…: Temporary price declines provide relief to oil marketing companies that incurred losses on retail petrol and diesel sales.
  • ICRA expects headline consumer price index inflation to average 5.2% during the FY2027 fi…: ICRA expects headline consumer price index inflation to average 5.2% during the FY2027 fiscal year.

Sources checked by our analysis pipeline: 1

NEW DELHI: Brent crude prices fell below $94 a barrel late on Wednesday for the first time in two months, before inching up to $97.7 Wednesday evening, as markets weighed the possibility of an end to the Iran conflict following the electoral setback to Republicans in the midterm elections and US President Donald Trump's acknowledgement that the war was a key factor in his party's loss.

The Indian crude basket, which averaged $119.9 a barrel in Oct - its highest level since March 2012 - fell to $103.8 on Tuesday, its lowest in two months, amid hopes of a resolution to the US-Iran conflict. Iran's exemption of commercial ships from four countries, including India and China, from transit restrictions in the Strait of Hormuz has also raised hopes among Indian refiners of improved availability of West Asian crude, their preferred grade, and a further easing of prices.

Brent has surged about 70% this year as the war disrupted supplies from the Persian Gulf and prices have remained volatile, with the US and Iran threatening each other. Although the post-poll price…

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