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OPEC to extend output cuts, to set up OPEC-India Working Group
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IANS | 27 May, 2017
Even as the OPEC and non-OPEC producers agreed to extend until March
2018 their ongoing oil output cuts, India has reached an understanding
with the global oil cartel to establish a joint working group to serve
as a forum for "producer-consumer dialogue" to address mutual concerns.
The
13-nation Organisation of Petroleum Exporting Countries (OPEC) on
Thursday agreed here to extend for nine months the output cut agreement
put in place for six months effective from January 1. The extension of
the accord, which was to expire in June, would effectively lower OPEC's
production by 1.8 million barrels per day.
Indian Petroleum
Minister Dharmendra Pradhan has been camping here since the beginning of
this week and led the Indian side at the India-OPEC Energy Dialogue on
Monday. "I believe the purpose of setting up this institutional
dialogue is to exactly serve this purpose, and to have a dialogue
between OPEC as a producer and India as a consumer, to sensitise each
other's concerns and to better understand our perspectives," he said at
the meeting.
"India is the only country where the demand will
continue to rise for more than a decade and this is where the need for
revisiting our engagement with OPEC is felt important," he said.
Urging
OPEC to work towards a "responsible pricing" for oil, Pradhan raised
the vexed issue of premium being charged on oil supplied to Asian
countries by some OPEC members.
In the talks with OPEC Secretary
General Mohammad Sanusi Barkindo, the Indian minister told OPEC to
address concerns of major buyers like India at a time when there were
multiple options in a situation of supply glut caused by US shale oil.
"The revolution in shale technology in the US is an important contributor to today's level of oil prices," Pradhan said.
"Our
group of seven refiners, who are here (Vienna) today, are working out
details of the strategy to buy cargoes, including from the US and
Canada, which is becoming very competitive," he added.
He also
pointed to the rapid expansion of renewable energy in India, which has
resulted, for instance, in the discovery of solar power tariffs as low
as 4 US cents per unit.
Last week, Saudi Arabia and Russia agreed on the need to prolong the current agreement on oil production cuts.
In
early December, oil producers outside OPEC, led by Russia, agreed to
reduce output by 558,000 barrels per day (bpd). This came in the wake of
OPEC's November 30 decision to cut output by 1.2 million bpd for six
months effective from January 1.
This is the first time since
2001 that OPEC and some of its rivals had reached a deal to jointly
reduce output to tackle the global oil glut.
Oil prices had earlier fallen by more than 50 per cent in less than two years, from levels of over $120 a barrel.
The
Indian basket, comprising 73 per cent sour-grade Dubai and Oman crudes,
and the balance in sweet-grade Brent, closed trade on Thursday at
$52.73 for a barrel of 159 litres, which was lower than the previous
day's close at $53.28.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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