The prices of petrol and diesel saw a slight decline across major cities on October 8, providing some relief to consumers. This comes as crude oil prices eased over $1 a barrel due to profit booking by traders. However, tensions in the Middle East continue to loom over the commodity markets.
According to reports, the prices of Brent crude and WTI futures fell by around 1.5-1.6% in international trading on Tuesday. This brought them down from over a month highs touched in the previous session. Traders chose to book profits given the relentless rise in crude rates fueled by threats of supply disruptions from the ongoing conflict between Israel and Iran.
However, analysts warn the downside may remain limited as demand from China returns after a week-long holiday. Any escalation in the Israel-Iran situation also threatens to stress supply. As such, traders will be closely eyeing key developments this week for clues on price direction. Inventory data will also influence near-term trading activity.
In the domestic market, petrol saw rates dipping marginally in New Delhi, Mumbai, Chennai and Kolkata among other cities. Diesel prices also eased across major urban centers. However, fuel rates still remain elevated compared to previous months due to the high crude oil environment. Any appreciation in crude rates in the coming sessions could again put pressure on domestic pump prices.
Consumers will hope that calmer heads prevail in the Middle East and geopolitical tensions de-escalate. A resolution would go a long way in supporting crude’s retreat from recent highs and help ease inflationary pressures domestically. But with the conflict showing no signs of ending just yet, volatility in global oil markets is likely to continue impacting domestic fuel rates in India.
