Rating agency, CARE Ratings has said that global crude oil prices are expected to hover in the range of $75-80/barrel until at least September 2021, but may revert to $75/barrel in case of higher Iranian supply and OPEC countries.
"Global crude oil prices, have recently breached its two years high mark of $75/barrel. The OPEC plus oil producers are expected to stick to the existing pace of gradually easing supply curbs, with an aim to balance the expectations of a growth in demand. Though the uncertainties in the global economic recovery, due to the resurgence of COVID-19 infections and renewed lockdowns in key economies cannot be overlooked," the rating agency has said.
According to the research report by CARE Ratings Economic recovery varies across countries, as some nations have successfully managed to contain the spread of covid-19 virus and vaccinate a significant proportion of their population, while others haven't.
"The resurgence of infections and renewed lockdowns in large economies like Europe, Japan and India, created a hindrance in path to recovery in H1- CY2021. However, the ongoing vaccination drives and rise in recovered cases has created optimism that the ongoing pandemic may not exceed beyond few months. Global oil demand is expected to gain pace in H2-CY2021, with improving mobility in major economies supporting transportation fuels demand. Improvements in pandemic containment efforts and seasonal summer demand will add to the growth. China and India will be key drivers in the Asian market supported by rise in industrial fuel demand, among others," the ratings agency has said.
Crude oil production in India during May 2021 declined by 6.3% YoY to 2,438 Thousand Metric Tonnes (TMT), while cumulative production for initial two months of FY22 declined by 4.2% YoY to 4,931 TMT. Oil and Natural Gas Corporation (ONGC) which contributed 2/3rd of the total crude oil production in May 2021 declined 9.6% YoY to 1,553 TMT, due to the adverse climatic conditions created by the cyclone Tauktae, which hit the Indian west coast (mainly Maharashtra and Gujarat) in mid-May.