Global Oil Prices Rise Amid Middle East Crisis, Impacting Markets and Indian Refiners

Key Takeaways:

• Rising Crude Oil Prices: Crude oil futures rose due to increased spot demand and participant bets, with WTI and Brent prices mixed in global trade.
• Global Supply Concerns: The Middle East crisis has intensified concerns about oil supply, impacting Indian refining companies and market stability.
• Indian Oil Market Impact: IOC is expanding refining and petrochemical capacities to meet India’s projected oil demand growth, planning for substantial future production.

Petroleum Price: Oil Prices Rise Amid Global Tensions

• Crude oil futures climbed Rs26 to Rs5,937 per barrel as participants widened their positions following a firm spot demand.
• Globally, West Texas Intermediate (WTI) crude was trading 0.38 per cent higher at $70.46 per barrel, while Brent crude was trading 0.39 per cent down at $74.67 per barrel in New York.
• On MCX, crude oil for November delivery traded higher Rs26 or 0.44 per cent at Rs5,937 per barrel in 14,205 lots. Analysts said raising of bets by participants kept crude oil prices higher in futures trade.

Petroleum Demand and Supply: Crude Oil Futures Increase

• The benchmark S&P 500 ended slightly lower and closed the week down nearly 1 per cent, driven by losses in utilities and financials as well as gains in technology and communication-services stocks. Nasdaq finished the week higher.
• The prospect of lower oil prices puts "lots of pressure" on Angola, the country's finance minister told Reuters on Friday, adding that she expected to see prices average around $70 to $72 per barrel compared with $75 in 2024.
• The government of Africa's second-largest crude oil exporter will also continue to phase out fuel subsidies, Finance Minister Vera Daves de Sousa said in an interview on the sidelines of the IMF and World Bank annual meetings in Washington.
• Angola left the Organization of the Petroleum Exporting Countries at the beginning of this year. Brent crude futures settled up 2.25% to $76.05 a barrel on Friday. Analysts have warned that oil prices would come under pressure next year due to ample supply and lackluster demand.

Petroleum News: Global Oil Market Outlook

• Global Crude Oil Prices are on a rising streak as the crisis in the Middle East continues to escalate. Brent Crude futures rose 2.25% to close at $76.05 per barrel during Friday’s Trade. U.S. West Texas Intermediate crude also gained 2.27%, closing at $71.78. Both Crude futures posted a weekly gain of approximately 4%.
• Meanwhile, Global equities declined on Friday, ending the week in red due to US election uncertainty. The S&P 500 benchmark index slipped marginally, finishing the week with a loss of almost 1%. The Dow Jones Industrial Average dropped 0.61%. European shares dipped 0.03%, while MSCI’s Asia-Pacific index, outside Japan, slipped 0.02%, posting a weekly loss of almost 2%.
• With tensions heating up in the Middle East thanks to the Israel-Iran conflict, Indian oil stocks are grabbing headlines.
• Such geopolitical disruptions threaten global oil supply, particularly through crucial routes like the Strait of Hormuz, raising concerns about India's fiscal stability.
• Coupled with rising crude oil prices and a weakened Indian National Rupee (INR), these factors are straining the ability of Indian oil refining companies to secure contracts from international markets.
• However, this downturn in refining stocks could turn into a goldmine once tensions in the Middle East start to ease.

Expert Opinion: India’s Growing Oil Demand and IOC’s Expansion Plans

• With India's oil demand forecasted to rise from 5.4 m barrels per day in 2023 to 8.3 m bpd by 2050, IOC is targeting significant growth. To meet this demand, the corporation aims to expand its refining capacity while scaling conventional and non-conventional energy solutions.
• In fact, IOC is set on meeting one-eighth of India's energy needs by 2050, positioning itself as a pillar of India's future energy landscape. IOC is also expanding its petrochemical capacity, which is expected to more than triple by 2030, with new plants being developed at Gujarat and Panipat refineries and enhanced lube oil base stock (LOBS) capacity at its Haldia complex.