The global oil benchmark, Brent crude, declined on Monday as the Organisation of the Petroleum Exporting Countries and its allies indicated that it was watching surging COVID-19 cases in India, the world’s third-biggest oil importer.
Brent crude, against which Nigeria’s crude oil priced, went down by $0.49 to $65.62 per barrel as at 8:31pm Nigerian time on Monday, according to EnergyIntel.
The US West Texas Intermediate crude also lost $0.26, falling to $61.88 per barrel.
Phil Flynn, senior analyst at Price Futures Group in Chicago, was quoted by Reuters as saying, “The market is on guard, coming back from India demand fears on reports that the OPEC technical committee acknowledged potential demand threats from the situation in India.”
The OPEC+ joint technical committee has kept its forecast for growth in global oil demand this year, but is concerned about surging COVID-19 cases in India and elsewhere, three sources from the producer group told Reuters.
OPEC+, consisting of OPEC and its allies led by Russia, will discuss output policy at a meeting later this week.
They had agreed at a meeting earlier this month to ease production curbs by 350,000 barrels per day in May, another 350,000 bpd in June and a further 400,000 bpd or so in July.
India had ordered its armed forces to help tackle surging new coronavirus infections that are overwhelming hospitals, as countries including Britain, Germany and the United States pledged to send urgent medical aid.
Consultancy FGE expects petrol demand in India to drop by 100,000 bpd in April and by more than 170,000 bpd in May. India’s total petrol sales came to nearly 747,000 bpd in March.
Diesel demand, which at about 1.75 million bpd, accounts for about 40 per cent of refined fuel sales in India, may slump by 220,000 bpd in April and by another 400,000 bpd in May, FGE said.