Crude oil prices fell nearly 1 per cent to ₹9,417 per barrel in futures trade on Wednesday, tracking losses in global benchmarks after the United Arab Emirates announced that it will exit the oil cartel OPEC producer group.
Analysts said persistent uncertainty over the US-Iran conflict and continued disruption in the Strait of Hormuz capped losses in oil prices.
On the Multi Commodity Exchange, crude oil for May delivery fell ₹68, or 0.72 per cent, to ₹9,417 per barrel.
Traders attributed the decline to weak global trends following the UAE’s announcement that it will leave the Organisation of the Petroleum Exporting Countries (OPEC) and its wider OPEC+ alliance effective on May 1.
The UAE had been a longtime member of OPEC, first through Abu Dhabi in 1967 and later after the country was formed in 1971.
In the international markets, Brent crude for the June contract decreased 0.34 per cent to $104.04 per barrel, and West Texas Intermediate (WTI) fell 0.68 per cent to $99.25 per barrel in New York.
Analysts at ING THINK said the departure of the UAE from the oil cartel is expected to have a limited immediate impact. However, it may raise supply prospects over the medium-to-longer term.
“Had this been announced at any other time, we would likely have seen more downward pressure on oil prices,” they said.
They added that near-term price direction will continue to be driven by developments in the Persian Gulf and the timing of a resumption in oil flows through the Strait of Hormuz.
With no signs of an imminent resumption in oil flows, ING revised its oil price forecasts for the rest of the year. “We now expect Brent Crude to average $104 per barrel in the second quarter and $92 a barrel in the fourth quarter,” it added.