Oil prices fell on Friday after hitting a three-year high of more than $70 a barrel the previous day, but they were still on track to post a fourth straight week of gains.
Oil prices hit their highest levels since 2014 on Wednesday due to ongoing production cuts led by OPEC as well as healthy demand, although analysts cautioned that markets may be overheating.
Oil prices eased on Tuesday after hitting mid-2015 highs in early trading, as major pipelines in Libya and the UK restarted and US production soared to the highest in more than four decades.
India is staring at an oily problem. Importing over 80 per cent of its oil requirement, the country is still heavily dependent on the vagaries of international oil and gas price trends to keep its expenditure in check.
After stellar gains in 2017, Indian equity investors confront two major risks in the new year—rising oil prices that may stoke inflation and force the central bank to raise interest rates, and an adverse outcome for the ruling Bharatiya Janata Party in state elections that could lead to more populist measures such as loan waivers, say analysts.
U.S. oil prices hit their highest levels since mid-2015 on the last trading day of the year as an unexpected fall in American production, as well as a fall in commercial crude inventories, stoked buying.
Firming crude oil prices in the global market is likely to cast its shadow on retail inflation, which has begun to move northwards after hitting a low of 1.46 per cent in June, and may prompt the RBI to hold interest rates at least for some time in 2018.
Oil prices witnessed big swings last week as the initial selloff reversed after the unexpected outage at the Forties pipeline.
The spike in crude prices to a two-year high of over $65 per barrel could have a bearing on the fiscal deficit at a time of uncertainty in tax.
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.