Indian oil companies raised the price of petrol and
diesel substantially in proportion to rising crude oil prices and consumer
demand, as economic activities are coming back to life.
The production cuts by the OPEC+ members, the draw
in US inventories and the steady demand in Asia eclipsed the effect of
Coronavirus in Asia.
The rise in oil price in India will be a political
football soon as the opposition parties lost no time in accusing government of ‘opportunism’;
they are up in arms against the move.
On global front, President Trump’s move to let an
orderly transition to the next administration on January 20, was encouraging
news after all for commodity markets in general and oil markets in particular.
His determination to bring Arab countries closer to
Israel, leaving behind decades of mutual animosities, did bring in relative peace
to the region.
Although the Sunni Muslim nations are at loggerheads
with the regional power, Iran, the threat of escalating tension in the region
is on the wane.
If the new US administration makes peace with Iran
and if the latter is allowed to sell its oil without hindrance, the flow of oil
from the Middle East will accelerate substantially.
This may be the scenario that the Saudis have been
worrying about, before stubbornly refusing to increase the production.
