Surging crude oil prices set warning alarm in India

New Delhi : There is much discussion going on round-the-clock regarding the surging price of crude oil. Most oil-consuming countries are worried about the rising oil prices, these days. Opec kingpin Saudi Arabia said it would make sure that the entire world get adequate supply of oil just. India a major consumer of oil, is likely to be frustrated with rising prices.

Saudi energy minister Khalid al-Falih called India’s petroleum minister Dharmendra Pradhan to assure him that supporting global economic growth was “one of the kingdom’s key goals”, the Saudi energy ministry said. India imports 85% of its oil requirements.

Crude oil prices have received major support from controlled supply cuts led by the Organization of the Petroleum Exporting Countries.

The International Energy Agency said oil inventories in the developed world had already hollowed below the five-year average, a measure targeted by OPEC and its allies.

Beyond OPEC’s cuts, strong demand, falling output from Venezuela and a US announcement this month that it would renew sanctions against OPEC member Iran have helped push up Brent by 20 percent since the start of the year.

US investment bank Jefferies said sanctions against Iran could eliminate more than 1 million barrels per day (bpd) from the market.

Barclays said output from Venezuela could fall below 1 million bpd. The country, also an OPEC member, produced around 1.5 million bpd in April.

In Nigeria, Shell declared force majeure on Thursday on loadings of Bonny Light crude. Exports of the grade were expected to run at nearly 200,000 bpd in June. Nigeria’s Forcados stream was also experiencing delays due to a pipeline leak.

BP, however, sees the rally cooling off. The oil major’s chief executive Bob Dudley told Reuters he sees oil falling to between $50 and $65 a barrel due to rising and falling of shale output and OPEC’s capacity to boost production.