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Informist, Wednesday, Feb. 5, 2025

MUMBAI – Despite rising sharply in January, Brent crude oil prices are expected to remain range-bound on the Intercontinental Exchange at an average of $75-$80 per barrel over the next six months, CareEdge Ratings said in a research report Wednesday.

This is mainly because of US President Donald Trump's stance of ramping up crude oil production in the country, the Organization of the Petroleum Exporting Countries continuing to largely maintain their production levels and no major disruption in the supply of Russian crude oil, the rating agency said.

At the same time, demand growth is expected to be relatively subdued in the backdrop of a slowdown in major global economies and a push towards electric vehicles and alternate fuels. At 1722 IST, the most active April Brent crude oil contract was at $75.32 per barrel, down 1.2% from the previous close.

The rating agency expects the gross refining margins of Indian public sector oil market companies to remain in the range of $4-$6 per barrel in the coming six months. The gross refining margins of these companies fell to an average of $4.80 per barrel in the first nine months of the financial year 2024-25 (Apr-Mar) from $11.75 per barrel in the corresponding period last year. This was mainly due to a decline in discounts available on sourcing Russian crude oil and a reduction in product cracks, especially diesel, which had previously gone up sharply in the aftermath of the Russia-Ukraine war, the report said.

CareEdge Ratings expects the blended retail margin on petrol and diesel for fuel retailers to remain healthy in the range of INR 7-INR 9 per litre, providing some scope for rationalisation of retail prices of petrol and diesel that have remained stagnant for long, it said.  End

US$1 = INR 87.47

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ashutosh Pati

Edited by Saji George Titus

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