Brent Crude Stays Above $107 Per Barrel As Oil Prices Ease After Three-Day Rise

Global crude oil prices traded lower on Wednesday morning after gaining sharply over the previous three sessions. Despite the decline, Brent crude continued to remain above the $107 per barrel level as concerns over the West Asia conflict and supply disruptions kept the market under pressure.

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At around 7:50 AM, the July Brent crude contract on the Intercontinental Exchange was trading at $107.08 per barrel, down 0.64% from the previous close. The June contract of West Texas Intermediate (WTI) crude also fell 0.64% to $101.53 per barrel.

Crude prices had risen around 8% during the last three trading sessions, including a nearly 3% jump in the previous session.

Trump Comments Keep Focus On Iran Conflict

U.S. President Donald Trump on Tuesday said the U.S. does not require China’s assistance in dealing with the Iran conflict.

Speaking to reporters before leaving for a state visit with Chinese President Xi Jinping, Trump said, “I don’t think we need any help with Iran”. He also said the U.S. would win the war “one way or the other”.

Strait Of Hormuz Closure Continues To Impact Oil Market

The Strait of Hormuz, a major route for global oil and gas shipments, has remained closed for nearly 75 days.

The waterway carries around 20% of the world’s oil and gas trade, and the prolonged shutdown has tightened energy supplies worldwide.

The disruption has also increased pressure on oil-importing countries such as India. As of May 11, the Indian crude oil basket stood at $104 per barrel. The Indian basket includes a combination of Brent Dated crude and the

Oman and Dubai average crude imported by domestic refiners.

Prime Minister Narendra Modi has appealed to citizens to reduce petrol and diesel consumption, use public transport and adopt work-from-home measures where possible to lower the country’s oil import burden.

OMCs Facing Heavy Daily Losses

Union Petroleum and Natural Gas Minister Hardeep Singh Puri said state-run oil marketing companies are facing significant losses as retail fuel prices remain unchanged despite the rise in global crude oil prices.
Addressing the annual general meeting of Confederation of Indian Industry, Puri said oil marketing companies are losing around ₹1,000 crore every day by selling petrol, diesel and gaseous fuels below cost.

He said the current situation is becoming a concern for the government and added that losses during the April–June quarter could erase the entire profit earned by fuel retailers in the previous financial year.