Petrol prices see another negligible cut of 7 paisa after yesterday's 1 paisa drop

Unless the IndianOil Corporation has goofed up again, the price drop in petrol is now 7 paise per litre and diesel is down 5 paise. After 16-straight days of price hikes since May 14, which saw petrol prices jump up by Rs 3.8 per litre and diesel by Rs 3.38, that's not really celebration-inducing, but it is still a whole lot better than yesterday's 1 paisa revision.

Petrol in Delhi now costs Rs 78.35 a litre, while the rates in Mumbai, Kolkata and Chennai stand at Rs 86.16, Rs 80.98 and Rs 81.35 per litre, respectively. The price of diesel in the capital is now Rs 69.25 a litre and Mumbai, Kolkata and Chennai are at Rs 73.73, Rs 71.80 and Rs 73.12 respectively.

This comes on the back of softening global oil prices. On Monday, the benchmark Brent crude was down over 6 per cent from a peak of $80 less than two weeks ago on expectations that OPEC and its allies could increase output. But following caution from the Russian central bank on the impact on the country's financial health from such a move it had again spiked 2.8 per cent yesterday. According to Reuters, today morning Brent crude was again down 20 cents at $77.30 per barrel, thanks in part to a surprise rise in U.S. crude inventories along with easing of OPEC curbs.

To remind you, OPEC's 13 (now 14) member countries and 11 (now 10) non-OPEC oil producing countries had started to withhold output in January 2017 to reduce excessive global stockpiles that had depressed oil prices since 2014. They had decided on voluntary production adjustments of around 1.8 million barrels per day, which caused global oil prices to shoot up from around $30 per barrel in 2016.

As per media reports, Saudi Arabia, the de-facto OPEC leader as well as top producer Russia are now thinking about raising oil production by some 1 million barrels per day. The biggest agenda for the upcoming June policy meeting of the OPEC/non-OPEC Joint Ministerial Monitoring Committee (JMMC) in Vienna is reportedly to figure out which countries will henceforth increase output production, and by how much.

"With the OPEC meeting still another three weeks away, oil prices are likely to remain sensitive to headlines," ANZ bank said in a note. So best buckle up for yo-yoing fuel prices in the days ahead.

With agency inputs