Crude oil dips 5 per cent

Crude oil hits a low of US$54.28 per barrel, tumbling 5 per cent to its lowest price since mid-September of 2017.

We can attribute the 5 per cent fall in oil prices to concerns about oversupply and a week energy demand environment following the US interest rate hike. The global stock markets fell after the US Federal Reserve raised interest rates on Wednesday. Dow Jones closed almost 2 per cent down and S&P 500 also fell by 1.58 per cent at the end of Thursday’s trading session, further weakening the crude oil prices. Major oil futures contracts declined 35 per cent from multi-year highs reached at the beginning of October.

Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) agreed on curbing output by 1.2 million barrels per day to boost prices. This cut will be observed from the next month onwards.

On Friday, oil marketing companies Hindustan Petroleum and BPCL gained. However, the Nifty energy index was down by 1.89 per cent. NTPC, Powergrid and ONGC managed to reflect gains on the Energy index, while IOC and TATA power were the biggest losers, shedding over 5 per cent each. The benchmark index also dipped significantly, BSE Sensex closed at 35,742.07, down by 689.60 or 1.89 per cent on Friday.