International oil prices in volatile mode | What does this mean for gasoline, diesel prices

International oil prices hovered in volatile mode as economic concerns and fears of recession weighed on global financial markets, outweighing supply concerns and geopolitical tensions in Europe. Oil prices fell more than 1% on Thursday.

On Thursday, Brent crude futures fell $1.32, or 1.2%, to $106.19 a barrel. West Texas Intermediate (WTI) crude oil futures fell $1.52, or 1.4%, to $104.19 a barrel, Reuters reported.

On Wednesday, global oil prices jumped 5% after Russia sanctioned 31 companies based in countries that imposed sanctions on Moscow after invading Ukraine.


Any variation in crude oil prices on the international market has an impact on crude oil prices on the domestic market.

Low production, political unrest in crude oil producing countries and global demand affect gasoline and diesel prices in India.

Domestic gasoline and diesel prices are linked to world oil prices. Gasoline and diesel tariffs following the rise in crude oil prices have remained high across India.

India is the world’s third largest oil importer and consumer, and a rise in crude prices tends to increase the country’s trade and current account deficit.

International oil prices are also seen as one of the reasons behind the volatility of the Indian stock market.

Rising oil prices are one of the reasons (for the fall in equities) given India’s vulnerability, but mostly I think it’s in anticipation of the inflation that’s going to happen to the United States. United and India,” said Yesha Shah, head of equity research. at Samco Securities, said.


Oil prices are under pressure this week, along with global financial markets, on jitters over rising interest rates, the strongest U.S. dollar in two decades, inflation concerns and a possible recession. Extended Covid-19 shutdowns in the world’s top crude importer, China, have also impacted the market, according to a Reuters report.

“These recession fears are getting stronger and pushing oil lower this morning,” said Howie Lee, an economist at Singapore’s Oversea Chinese Banking Corp, pointing to strong consumer price index data on Wednesday. (CPI) US.

However, supply issues stemming from Russia’s invasion of Ukraine have boosted the market, with prices up more than 35% so far this year. An impending European Union ban on oil from Russia, a key supplier of crude and fuels to the EU, which could further tighten global supplies, is supporting prices.

Moscow’s sanction created unease in the market even as Russian natural gas flows to Europe via Ukraine fell by a quarter. It was the first time that exports through Ukraine had been halted since the invasion.

Price gains were limited by concerns over falling demand in China as it tries to curb the spread of the coronavirus.

“Until we see significant political support arriving in China or policymakers adopt an alternative strategy to COVID (which seems very unlikely), oil prices could remain capped in the near term,” Stephen said. Innes, managing partner at SPI Asset Management.

In the United States, commercial crude inventories rose last week due to a record release of oil from U.S. strategic reserves, but gasoline inventories fell ahead of the peak of the summer demand season, said Wednesday the Energy Information Administration.

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Felix J. Dixon