Crude oil prices in the international market were down marginally in response to a fresh crisis triggered by four Arab nations snapping their diplomatic ties with Qatar for the country's alleged links with terror groups Al-Qaeda and ISIS.
Reuters reported that Brent crude prices CLc1 rose 35 cents, or 0.70 percent, to $50.30 a barrel in early trade while the US West Texas Intermediate futures CLc1 was trading 37 cents higher at $48.03 a barrel.
It was only a few days ago that members of the 14-member OPEC cartel — comprising Saudi Arabia, UAE, Qatar, Oman, Kuwait, Algeria, Venezuela, Indonesia, Nigeria, Angola, Gabon, Iraq and Iran — had agreed to extend the November 2016 cap on output of 1.8 million barrels per day (bpd), to March 2018. The output deal was initially supposed to expire this June.
Qatar's production capacity is about 600,000 bpd.
Oil marketing companies remained largely neutral to the development on the stock exchanges. At around 3 pm, Indian Oil Corporation (IOC) shares were up 1.33 percent to Rs 420 apiece, HPCL was up 1.08 percent to Rs 543 and BPCL was trading 1.17 percent higher at Rs 734.
India is a net oil importer of crude oil, meeting about 80 percent of its annual requirement through imports from these countries. The oil import bill of $69.72 billion (provisional) for 2016-17 was up almost 9 percent from $63.97 billion in the preceding fiscal, according to the union ministry of petroleum and natural gas' Petroleum and Planning Analysis Cell (PPAC).
The rise in value terms marked an end to the gains the country had from the slump in crude oil imports caused by a supply glut that was addressed both by OPEC and non-OPEC members last November/December.
In its March 2017 report released on Monday, PPAC said that the volume imports rose to 213 million metric tonnes (MMT) for 2016-17 from 202.85 MMT in 2015-16.
India benefited a lot from falling crude oil prices globally, given that it meets 80 percent of its oil needs through imports. For 2013-14, the oil import bill was $167.6 billion when the average crude oil price for the Indian basket was $105.2 per barrel.
The next financial year saw the bill falling sharply to $112.7 billion at an average price of $85.2 per barrel, though the quantity imported remained almost steady at 189 MMT. For 2015-16, the bill plunged to a record low of $63.97 billion though the volume imported rose to 202.85 MMT.
The price of Indian basket crude rose by 3 percent during 2016‐17 at an average of $47.56/bbl as against $46.18/bbl during 2015‐16, the PPAC said.
