Crude oil prices to remain in the range of $70-$80 says experts  

August 28, 2009

Crude oil prices are expected to remain in the range of $70-$80 per barrel in 2009 due to current optimism about economic revival, geo-political tensions across the world and weakness in the dollar, said oil experts.

Following the oversupply of crude, many market observers and participants anticipates softening in the prices, but at the same time, the global demand for crude has declined by 2.3 million barrels per day (mbpd) to 83.9 mbpd, between January to July this year, said Vandana Hari, Asia news director of Platts.

Platts, a division of The McGraw-Hill Companies is a global energy and metals information provider.

According to International Energy Agency (IEA), the global supply in July rose by 570,000 bpd and two-thirds of this was supplied by Organisation of the Petroleum Exporting Countries (OPEC) northern region.

Worldwide demand and supply scenario, although, is showing mixed trends. While demand contraction in Europe widened to around 900,000 bpd, crude oil demand from China has gone up. During the second quarter to June, China's demand grew by 10.8% from the same period last year, which is in contrast with a 10% fall in first quarter 2009.

Separately, Platts has also introduced a new series oil price benchmarks for the Indian oil markets. The benchmarks, called as Mean of Platts West India Netbacks or MOPWIN would help meet a critical need of reliable and transparent price information for oil products exported from India to world markets, Platts said.

Exports of petroleum products are the largest foreign exchange earner for India. Net product exports have almost doubled to nearly 18.13 million mt in 2008-09 from around 9.38 million metric tonnes (mt) in fiscal year 2004-05, and are poised to continue climbing.

'Hence, there was a demand for better benchmarks both from the government in India and the exporters. These new reference prices will provide a critical valuation of the oil as it is exported from India. Early feedback tells us clearly that these prices are just as important to our readers within India, as in the rest of the world,' said Vandana Hari in a release.

With almost 100 million tonnes per annum of refining capacity to be ready by end-2011 on the Western coast, India will emerge as an important destination for export of petroleum products.

Even land-locked refineries are connecting themselves to the coast by laying product pipelines for exports with an eye on supplying markets in Europe, Africa, the U.S. and Asia. Refiners in both the public and private sector have embarked on projects to set up new refineries and expand existing facilities, the release added.