On Tuesday, the price of Brent crude oil touched a new two-year high at $65.29 per barrel. Responding to the situation, Oil Minister Dharmendra Pradhan on Wednesday said that the ministry is closely monitoring oil prices. India is a large importer of Brent oil prices and was benefitted significantly when oil prices were low, but the constant rise and even the fear of hitting it $70 per barrel would be watchful if not alarming.
On Tuesday, the Brent crude oil price jumped up by 0.9% after the shutdown of the Forties North Sea pipeline knocked out significant supply from a market that was already tightening due to OPEC-led production cuts. Forties North Sea, which delivers the crude oil, is likely to be shut for weeks to carry out repairs to an onshore section of the line. The New York blast was also the reason behind the jump in the oil prices.
There are several reasons that are keeping the price of Brent crude oil above $60 per barrel. However, Vandana Hari, a market analyst, told CNBC-TV18 that despite OPEC and non-OPEC countries vowing to cut oil output in an effort to boost the price, will start softening by June next year once the winter demand starts falling. She said until then it is normal to for Brent crude oil to hover above $60 per barrel. Read More
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