Tag: crude

  • Global oil prices rise amid supply concerns

    Global oil prices rise amid supply concerns

    Oil prices increased on April 20, swamped by fears about tightening supply as the European Union (EU) considers a possible ban on Russian oil imports, which would further impede global oil commerce.

    After reaching a high of $109.80, Brent oil futures finished up $1.53 to close at $108.33 a barrel. After earlier reaching a high of $105.42, U.S. West Texas Intermediate (WTI) crude futures ended up $1.60, or 1.6 per cent, at $103.79.

    Consumers also reacted to continued disruptions in Libya, where blockades at major fields and export terminals have resulted in a loss of about 550,000 barrels per day of oil supply.

    Brent has climbed about 8 per cent in the last seven days of trading, but the advance has been calm and steady, unlike the frenzy that surrounded Russia’s invasion of Ukraine in late February and again in mid-March.

    Last week, US crude exports increased to more than 4 million barrels per day, slightly countering Russian crude losses caused by US and European bans.

    Read more: Pakistani rupee plunges by Rs1.05 against the US dollar

    The oil market is still constrained, with the Organization of Petroleum Exporting Countries and its affiliates, led by Russia, striving to achieve output commitments and US crude inventories plunging dramatically in the week ending April 15.

  • Global oil prices climb to highest in three weeks

    Oil prices increased on Monday as fears of limited global supply intensified, with the developing crisis in Ukraine raising the risk of more penalties from the West against Russia, the world’s leading exporter.

    Brent futures were up $1.50, or 1.3 per cent, at $113.20 a barrel, while US West Texas Intermediate futures were up 98 cents, or 0.9 per cent, at $107.93 per barrel. Both contracts surged more than 2.5 per cent on April 14, ahead of the Easter weekend holidays, on news that the European Union would phase in a ban on Russian oil imports.

    Last week, EU governments said that the bloc’s executive was working on ideas to ban Russian oil, but officials said Germany was not actively backing an immediate ban.

    Those remarks came before the Ukraine situation escalated over the weekend, with the Ukrainian military defying a Russian demand to lay down arms in the pulverised port of Mariupol on Sunday. Moscow, which refers to its efforts in Ukraine as a “special operation,” said its soldiers had nearly entirely captured the city, with no sign of a truce in sight.

    Read more: Oil prices jump following Russia’s biggest production decline

    Due to sanctions or importers voluntarily rejecting Russian shipments, the International Energy Agency has warned that around 3 million barrels per day (BPD) of Russian oil might be shut in from May onwards.

  • Another hike of Rs4.9 per unit approved in power tariff

    Another hike of Rs4.9 per unit approved in power tariff

    Owing to the monthly Fuel Cost Adjustment (FCA) for February, the National Electric Power Regulatory Authority (NEPRA) on April 15 increased the price of electricity by Rs4.85 per unit.

    It has also announced an increase in the price of power, stating that the power output in February was more expensive than the previously set fuel price.

    According to the notice, the power distribution companies (DISCOs) will collect the amount from electricity consumers in the April bill. In addition, consumers will be hit with a charge of Rs37.7 billion, excluding general sales tax (GST). However, K-Electric and lifeline customers will be exempt from the hike.

    On March 31, the NEPRA held a hearing to determine the FCA but did not make a decision. The Central Power Purchasing Agency (CPPA) requested that the cost per unit be increased to Rs4.94 by the NEPRA.

    Following the monthly FCA, which only operates for one month, the administration had already hiked the power price to Rs5.95 per unit for the month of January.

    As per NEPRA’s data, the most expensive energy production sources, including High-Speed Diesel (HSD) and Residual Fuel Oil (RFO), were used more than average in the prior months, raising the overall cost of production.

  • PM Shehbaz rejects OGRA’s proposal, petrol price to remain unchanged till April 30

    PM Shehbaz rejects OGRA’s proposal, petrol price to remain unchanged till April 30

    Pakistan’s new Prime Minister (PM) Shehbaz Sharif on Friday dismissed the proposal from the Oil and Gas Regulatory Authority (OGRA) to raise the price of petroleum products for the fortnight. The recent decision is aimed at providing relief to the public affected by inflation.

    It is worth noting that the present government’s choice to maintain the same prices will oblige it to provide another substantial subsidy till the end of April 2022.

    Earlier, OGRA suggested to the Finance Division that the price of petrol be increased by Rs21.50 and that of diesel be hiked by Rs51.30 in view of the current petroleum levy and general sales tax (GST).

    Read more: Massive hike of Rs83.5 for petrol, Rs119 for diesel proposed by OGRA

    The authority also proposed a hike of Rs83.50 per liter of petrol and Rs119.88 per liter of diesel considering the federal government’s recommended petroleum levy of Rs30 and 17 per cent GST, as per the official statement.

  • Massive hike of Rs83.5 for petrol, Rs119 for diesel proposed by OGRA

    Massive hike of Rs83.5 for petrol, Rs119 for diesel proposed by OGRA

    The Oil and Gas Regulatory Authority (OGRA) suggested the federal government elevate fuel prices by up to Rs83.5 per liter for petrol and Rs119 for diesel.

    A summary to the petroleum division was presented by OGRA for the huge increase in petroleum rates to come into effect on April 16 in Pakistan.

    The proposed raise was calculated using a 70 per cent GST rate plus a Rs30 per liter levy. It is worth noting that the current duty on fuel and diesel is Rs30 per liter, plus 17 per cent GST.

    On the basis of complete levy and taxes, the body has recommended raising petrol prices by Rs83.5 per liter, while diesel prices should be raised by Rs119 per liter.

    According to reports, the OGRA proposed raising the petrol price to Rs21.53 per liter in line with the current tax rate, Rs51.3 for diesel, and Rs77.56 for kerosine oil on the grounds of full tax and levy.

    Read more: Gold prices go up by Rs350 per tola to Rs130,300

    Concerning other oil products, a full tax rate and levy hike of Rs77.31 was suggested for light diesel, Rs36.5 for kerosine oil, and Rs38.89 for light diesel. According to sources, the finance ministry would make the final decision on the OGRA summary after briefing Prime Minister Shehbaz Sharif.

  • Oil prices jump following Russia’s biggest production decline

    Oil prices jump following Russia’s biggest production decline

    Oil prices rose on April 13, after concerns that declining output in sanctions-hit Russia may affect supply, following the Russian announcement that peace negotiations to stop its invasion of Ukraine had reached a stalemate.

    Consequently, Brent crude futures were up 59 cents, or 0.6 per cent, to $105.23 a barrel, while West Texas Intermediate (WTI) crude futures were up 60 cents, or 0.6 per cent, to $101.20 a barrel. The previous session saw both contracts rise by more than 6%.

    On Tuesday, Russian President Vladimir Putin criticised Ukraine for the termination of peace talks and stated that Russia will not abandon its “special operation” to disarm its western neighbor.

    He stated that peace talks with Ukraine are at a stalemate, but that the seven-week operation is going as planned. In a note, ANZ oil experts stated that this raises the threat of the prolonged potential of supply disruptions in the oil sector.

    According to those familiar with the figures, Russian oil and gas extract output declined below 10 million BPD on April 11, the biggest drop since July 2020, as a result of sanctions imposed by numerous nations after Russia invaded Ukraine and logistical difficulties, which hindered business.

    This is quite serious as Russia is the world’s second-largest oil exporter.

    According to reports, Russia’s Energy Minister Nikolai Shulginov said late Tuesday that the government was willing to sell oil and oil products to “friendly countries in whatever price range,” adding that Moscow was focused on guaranteeing the oil sector’s proper functioning.

    Read more: International oil prices declined by 4%, crashing below $100 per barrel

    Meanwhile, indications of a partial relaxation of some of China’s strict COVID-19 restrictions have fueled optimistic sentiment between some market players this week.

  • International oil prices declined by 4%, crashing below $100 per barrel

    International oil prices declined by 4%, crashing below $100 per barrel

    Brent crude slid below $100 for the first time since March 16 amid plans to release huge amounts of petroleum and oil products from strategic storage, and also China’s prolonged coronavirus closure.

    Crude oil was down $4.1, or 3.99 per cent, at $98.68 per barrel. The price of US West Texas Intermediate (WTI) crude fell $4.28 a barrel, or 4.28 per cent, to $94.07 per barrel.

    The International Energy Agency (IEA) recently announced that member countries will release 60 million barrels over the next six months, with the United States matching that amount as part of its 180-million-barrel release announced in March.

    The actions are meant to make up for a shortfall of Russian crude after Moscow was extensively sanctioned for what it claims was a “special military operation” in Ukraine.

    As per JP Morgan analysts, the release of Strategic Petroleum Reserve (SPR) volumes will amount to 1.3 million barrels per day (BPD) over the next six months, enough to cover a 1 million BPD shortfall in Russian oil supplies.

    The release of strategic government oil reserves is projected to relieve some market tightness in the coming months, reducing the likelihood of oil prices rising and re-enforcing near-term supply constraints.

    While this is the largest release since the IEA stockpile was established in 1980, market participants believe it will fail to affect the principles of the oil market and will just delay further increases in production from crucial suppliers.

  • State Bank of Pakistan hikes interest rate to 12.25% in an emergency meeting

    State Bank of Pakistan hikes interest rate to 12.25% in an emergency meeting

    Following an emergency meeting, the State Bank of Pakistan (SBP) raised interest rates by 250 basis points, as mounting political uncertainty and rising worldwide oil prices threaten to drive the country into a full-fledged economic catastrophe.

    The key rate is now 12.25 per cent, as per the latest statement released by the central bank on Thursday. According to the report, this makes the real rate “mildly positive” and will assist maintain external and price stability.

    The judgment came a few hours before the Supreme Court was due to rule on the constitutionality of Prime Minister Imran Khan’s disputed move to dissolve parliament and hold new elections. Pakistan may find it difficult to persuade the International Monetary Fund (IMF) to grant a much-needed loan tranche due to the political limbo.

    At the recent briefing, SBP governor, Reza Baqir, said, “We thought it’s important to take decisive action”.  He added that the body does not intend to do anything else.

    The central bank claimed that intensified domestic political turmoil contributed to the rupee’s 5 per cent loss and caused a jump in local bond rates, as well as Pakistan’s Eurobond yields and Credit Default Swap (CDS) spreads. Oil prices are likely to remain elevated, and the Federal Reserve of the United States is expected to compress sooner than expected, according to the report.

    The PKR broke all records on Thursday, selling at more than Rs189 per dollar in intraday trading in the interbank market, continuing a slump that has witnessed its decline of more than 10 per cent since March 4.

    Read more: Pakistan to import 32.7 million barrels of oil to cover petroleum needs

    Pakistan’s political instability, in addition to money from the IMF, is causing delays in a planned $1 billion green bond offering. A refinancing from China is also expected; the repayment in recent weeks caused Pakistan’s foreign-exchange reserves to plummet to their lowest level since records began in 2010.

    In a meeting last month, SBP cautioned that it might convene earlier than planned to avoid a crisis. It revised its average inflation prediction for the fiscal year ending in June from 9 per cent to little more than 11 per cent.

  • Pakistan to import 32.7 million barrels of oil to cover petroleum needs

    Under a deferred payment agreement with the Saudi Fund for Development (SFD), Pakistan would acquire roughly 32.7 million barrels (MBL) of crude oil in 2022 to cover its petroleum product needs.

    The Pak-Arab Refinery Company Limited (PARCO) and National Refinery Limited (NRL) plan to import 16.89 and 15.81 million barrels of oil in the ongoing year, respectively.

    Crude oil worth $100 million per month may be imported under the terms of the arrangement, with payment deferred for a year. The price will be set in accordance with the existing long-term agreement between Saudi Aramco, PARCO, and NRL.

    The facility will be available for a 12-month period, which may be increased for one year. The withdrawn funds, plus the margin of 3.8 per cent, will be repaid in one annual installment in US dollars.

    Previously, In June 2021, the Saudi government agreed to pay $4.2 billion in providing economic aid to Pakistan, which was legally formalised in November. While the SFD programme has been in effect since March 7, 2022, and oil purchase has now already begun.