ISLAMABAD
Oil prices inched up on Tuesday on supply concerns and uncertainty surrounding smooth crude supply from Florida’s Gulf Coast.
As of 1315 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.23 (+0.27 percent) to reach $84.65 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.15 (+0.19 percent) to $80.25 a barrel. Both Brent and WTI ended last week lower by 0.38 percent and 1.75 percent, respectively.
However, the price of Russian Sokol decreased by $0.53 (-0.67 percent) to $78.83. Arab Light prices witnessed a decrease of $0.68 (-0.76 percent) to reach $88.28 a barrel. On the other hand, the price for Opec Basket increased by $1.18 (+1.38 percent) to $86.89. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Tropical Storm Idalia swirled into a hurricane on Tuesday after skirting past Cuba as it closed in on Florida’s Gulf Coast. The storm is likely to cause power outages and could impact crude production. Such incidents will remain catalysts in upward movement as the oil community is currently very sensitive to interruptions to any refinery, anywhere in the world.
A recent batch of economic data from China, the world’s second largest oil consumer, has highlighted a rapid loss of economic momentum since the second quarter. China’s sputtering economy has whipsawed global financial markets in the past few months, with a property crisis spooking investors amid contagion fears. Supply cuts from Opec+ continue to support the market, but uncertainty over the global economic outlook – sluggish recovery in China, possible recession in the US and Europe – are weighing a little.
On the local front, persistent fall in the value of the rupee against the US dollar is likely to jack up petroleum products prices by over Rs20 per litre in the next fortnight review due on August 31. The exchange rate of the greenback has increased by Rs14.91 from August 16, 2023 to August 29. While only two working days are left in the ongoing fortnight, a further increase in the dollar’s value remains on the cards. In the last two fortnights, the petrol price has already increased by Rs37.50 and diesel by Rs40 per litre.
