International crude oil benchmark, Brent futures touched $70.03 a barrel on Thursday. It is the first time, since 12 November 2018, that the benchmark has crossed the $70 mark.
The fuel prices in India are based on the movement in the global crude oil prices for the last 15 days and foreign exchange rate. As a result, petrol prices across Indian cities were increased by 5 paise a litre to Rs 72.91 in New Delhi, Rs 74.93 in Kolkata, Rs 78.48 in Mumbai and Rs 75.67 in Chennai.
Diesel prices, on the other hand, remained unchanged at Rs 66.14 in New Delhi, Rs 67.88 in Kolkata, Rs 69.22 in Mumbai and Rs 69.83 in Chennai. It can be noted that these rates were hiked on Thursday while petrol prices remained stagnant.
In the global scene, oil prices rose as expectations of a tight global supply outweighed the increase in US crude production. The OPEC (Organization of Petroleum Exporting Countries) and its allies had made an agreement back in December to cut oil production by about 1.2 million barrels per day in 2019.
Despite the surge in supplies from the US, analysts do not expect it to suffice the possible increase in demand.
The US and China recently reported a better than expected improvement in their economy. China's Caixin/Markit services purchasing managers' index for March rose to 54.4, the highest since January 2018. The PMI numbers and the potential improvement in trade talks with the US have added to the expectations of an increase in oil demand.