New Delhi, Aug 25:
Continuing its free fall, the Indian basket of crude oils fell over $2.50 over the weekend to $42.97 a barrel on the previous trading day before, as per official data released on Tuesday, even as global crude oil prices plummeted to fresh six-year lows.
The Indian basket — comprising 73 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent — fell to its lowest since December 2008 when the prices averaged $40.61 for the month, as per data with the government-run Petroleum Planning and Analysis Cell.
Data, that comes with a lag of one day, showed the Indian basket plunged on Monday below its earlier lowest this year at $43.36 in January, which had resulted in the Reserve Bank of India (RBI) making the first of its interest rate cuts after a gap of nearly two years.
This is the second time this year that oil is dropping below the psychological $50-a-barrel mark from levels of over $100 last year.
Two key benchmarks, Britain’s Brent and the US Western Texas Intermediate, were trading lower at $43.13 per barrel and $38.67 per barrel, respectively, at mid-session trade on Tuesday.
The basket of 12 crude oils of the Organisation of Petroleum Exporting Countries (OPEC) closed at $40.67 a barrel on Monday, compared to $43 last Friday.
Particularly since global powers signed the historic nuclear deal with Iran last month, traders have been worried that crude supply might exceed the demand.
In July, the OPEC crude production increased by 101,000 barrels per day to average 31.51 million barrels per day, according to OPEC’s monthly oil market report last week.
Oil prices have been under pressure for several months due to concerns over oversupply, but the slump has deepened in recent weeks fuelled by fears of a sharp slowdown in the Chinese economy.
The fall in oil followed an 8.5 percent decline in the Shanghai Composite Index on Monday. China is the world’s second-largest consumer of oil after the US.
Chinese shares lost another 4 percent in trade on Tuesday.
In a move to deal with current economic weaknesses, the Chinese central bank lowered its daily reference rate by 1.9 percent earlier this month, rocking currency markets globally and affecting also the rupee. (IANS)