NEW DELHI: Spelling a further increase in domestic fuel prices if the government does not reduce taxes, international crude oil prices have continued to gain steadily over the past few days as the freezing conditions in the Texas region of the United States and sharply rising global demand have pushed crude oil prices steadily upward.
On Thursday, Brent crude oil hit levels last only seen on January 8, 2020 at $67.70 per barrel, before easing a little to fall just below the $67 mark.
Analysts say that the general trend in crude prices is only likely to be upward, and several, such as Goldman Sachs, have revised their forecasts upward. On the part of Goldman Sachs, it’s analysts released a note stating that it now expects crude oil to reach $70 per barrel. While a faster-than-expected economic
recovery has already put pressure on global oil prices, the unseasonal freeze in Texas has taken out much of United States oil production.
According to the US energy department, overall US oil output fell by 1.1 million barrels per day to 9.7 million barrels per day in the week leading up to February 19, the EIA said. Brent crude futures for April, meanwhile, gained rose to $67.23 per barrel, while West Texas Intermediate crude for April was at $63.30 a barrel. Barclays, which raised its oil price forecasts on Thursday, also said that oil prices could rally again due to the weaker-than-expected supply response by US oil operators.
“We remain cautious over the near term on easing OPEC+ support, risks from more transmissible COVID-19 variants and elevated positioning,” Barclays added. A further increase in crude oil prices will likely push domestic petrol rates past `100 per litre in several more places where state government VAT levels are higher than in other states. While central excise duties form the larger part of total taxation on petrol and diesel, state governments charge varying levels of VAT.