International oil prices fell on Monday on concerns of storage facilities rapidly filing up and indicating that production cuts have not been fast enough to catch up with the collapse in demand due to COVID-19.
US oil futures, which dictates fuel prices in North America, led losses after US crude inventories rose to 518.6 million barrels in the week to 17 April, near an all-time record of 535 million barrels set in 2017. Its floating crude oil storage has already hit an all-time high of 160 million barrels.
There are fears that the storage at Cushing, Oklahoma, could reach full capacity soon causing its benchmark index- US West Texas Intermediate futures to fall $1.49 or 8.8 percent to $15.45 a barrel.
Brent crude, the global price benchmark for oil prices, including India, was down 44 cents or 2.1 percent to $21 a barrel.
Last week, oil futures marked their third straight week of losses and have fallen for eight of the past nine weeks. Brent has fallen by 24 percent. Last week, May WTI contract plunged into negative territory for the first time ever two days before expiry as financial traders scrambled to avoid having to take delivery of oil.
To avoid a similar fate, investors are moving away from June contract to later months, according to a Reuters report, causing the currently seen decline in oil prices.
Petrol and diesel prices in India
Petrol and diesel prices in India remained unchanged for the 42nd straight day on Monday. These rates are revised on a daily basis by state-owned oil retailers, however, they have been the same as that on 14 March despite a fall in oil prices.
Retail prices of fuel in India is based on changes in Brent crude, fluctuations on rupee's exchange value and government-imposed taxes.
Oil futures trading was extremely volatile last week as demand for oil has collapsed 30 percent due to the pandemic and producers are not cutting outputs as quickly or deeply enough to form a balance.
Rig counts in the US are down to the lowest since July 2016, while the total number of oil and gas rigs in Canada has fallen to the lowest since at least 2000, according to Baker Hughes data cited by Reuters.
Kuwait and Azerbaijan are coordinating cuts, while Russia is set to reduce its western seaborne exports by half in May.
Earlier this month, the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, pledged to cut output by an unprecedented 9.7 million barrels per day in May and June.