NEW DELHI: Crude oil prices spiked on Monday morning to over $53 per barrel, for Brent, before diving to below $51 per barrel as members of the oil exporters cartel OPEC met via video conferencing to thrash out a consensus on whether or not to increase production in February.
The decision will have an impact on fuel prices in India if the group decides to keep output steady at current levels.
With Chinese oil demand turning out to be stronger than expected, crude prices will likely keep trending upward if the status quo on output is maintained.
While far lower than at the beginning of 2020, the global economic recovery has led to a steady recovery in crude prices—from below $30 in May to over $51 currently.
Indian fuel prices have risen in tandem, helped along by sharp increases in Central and state taxes on petrol and diesel.
Monday’s meeting comes just a month after the OPEC last met and decided to increase January production by 500 million barrels per day.
They also decided to meet again early January to decide on whether to keep increasing output in February.
On Sunday, OPEC’s general secretary Mohammed Barkindo said that the agreement had “paved the way for a gradual return of 2 million barrels per day to the market over the coming months”.
However, reports say that many OPEC members are not in favour of continuing to increase production.
Among their concerns is the increase in Covid-19 cases in many countries, including in high-consumption areas like Europe and Asia.
A low production would also mean rising prices provided economic activity continues to recover.