Friday 15 / November / 2024
Muscat: M91 and M95 petrol have become cheaper for motorists in Oman this month, compared with March, after the government cut fuel prices on Friday.
According to an official notice released by the government, M95 petrol will now cost 192 baisas a litre, while the M91 will cost 180 baisas a litre. Diesel will cost 200 baisas a litre.
In March, M91 fuel was priced at 186 baisas a litre. Meanwhile, the price of M95 was 198 baisas and the price of diesel was 208 baisas. Oil prices fell on Friday after a three-day rally ran out of steam as a higher US rig count signalled rising production from shale, contributing to the global supply glut.
Prices have been locked within a range during the first quarter as traders searched for signals as to whether the Organisation of the Petroleum Exporting Countries’ (OPEC’s) production cuts would be effective or US production will continue to offset efforts to rebalance the market.
Export cut
Last week, the Ministry of Oil and Gas said Oman will cut crude oil exports to Asia by 15 per cent to meet local demand. The cuts are expected to begin from June.
The cuts will partly account for the 45,000 barrels per day that are promised to be slashed by Oman as a part of a production cut agreement with OPEC members.
“The Ministry of Oil and Gas has informed its customers on contract in Asia that it will reduce supply by 15 per cent starting in June.
“The supply cut is to meet rising demand at the state-owned Sohar Refinery,” an official from the Ministry of Oil and Gas confirmed for the Times of Oman.
According to a media statement from OPEC on the meeting with non-member states in Kuwait City, the committee has requested the OPEC technical committee and secretariat to “review” the oil markets conditions and revert to them in April 2017 regarding the extension of voluntary production adjustments.
Earlier, reports emerging from the meeting suggested that voluntary production adjustments could roll over beyond June for another six months due to a rise in prices noticed post the OPEC deal in December.
The current OPEC agreement triggered a price rally that saw Oman crude prices double to above $55 a barrel in three months, before falling to a sub-$50 level last week over concerns of rising US inventories.
However, rising shale production in the United Sates has cast a shadow over the production adjustments extending until the end of the year. Data from International Energy Agency (IEA) showed that US inventories grew at an unprecedented rate, while demand slowed since December 2016. Under the OPEC deal signed in Vienna last year, Oman had promised to cut 4.5 per cent of crude oil produced to control the supply glut that has hit global markets since 2015.
The deal witnessed an unprecedented compliance rate of 94 per cent in February, according to OPEC, reflecting an 8 per cent increase from January.
Oman’s crude oil output had averaged 1 million barrels a day for the first time in history in 2016 before the Sultanate agreed to production cuts.
