ISLAMABAD
Crude oil prices climbed on Monday on signs that US policymakers are likely to keep interest rates higher for longer.
As of 1355 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.72 (+0.87 percent) to reach $83.51 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.85 (+1.09 percent) to $79.11 a barrel.
On the other hand, the price of Arab Light decreased by $1.71 (-1.96 percent) to reach $85.53 a barrel. Similarly, the price of Russian Sokol decreased by $1.58 (-2.02 percent) to $76.54 a barrel. On the other hand, the price for Opec Basket increased by $0.70 (+0.84 percent) to $84.30 a barrel.
The analysts expect the US central bank to keep its policy rate on hold for longer, supporting the dollar and making dollar-denominated oil more expensive for investors holding other currencies. Expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, will extend supply cuts into the second half of the year have also endured. Iraq, the second-largest OPEC producer, is committed to voluntary oil production cuts agreed by the producer group, its oil minister told the state news agency on Sunday.
Meanwhile, China, the top global crude importer, recorded a rise in exports and imports in April, a rebound from a contraction in the preceding month, indicating growing momentum in the world’s second-largest economy. Exports from China grew 1.5 percent on an annual basis last month after falling 7.5 percent in March, which marked the first contraction since November, according to customs data. The country’s imports surged by 8.4 percent in April, reversing a 1.9 percent decline seen in March.
Oil prices have fallen by about 7 percent since reaching a six-month high of $91.17 a barrel in early April when Houthi attacks on ships in the Red Sea and the war between Israel and Hamas sparked concerns of a broader conflict.
On the local front, the government is likely to cut the price of petrol by another Rs12.8 per litre for the second half of May 2024, in line with the decline in international prices. Price estimates till May 13 indicate international petroleum product prices have fallen significantly compared to the last fortnight. The decline would be on top of the Rs5.45 cut from the last fortnight when the government lowered the price to Rs288.49 per litre. Moreover, the government is expected to cut the price of high-speed diesel (HSD) by around Rs8.3 per litre due to a drop in its international price. TLTP
