- Production cuts in Libya, Kazakhstan, Russia-Ukraine geopolitical issue responsible
Crude oil continues to rise. A recent meeting of OPEC countries has decided to increase production but production will increase from March. Brent crude jumped $92 to .3 92.33, while WTI was quoted at .5 91.58. .
Analysts are showing signs of a sharp rise in crude to $100 this month. The last seven weeks have seen crude prices rise by about 26 per cent.
In addition to the ongoing geopolitical issue between Russia and Ukraine, there have been statements that China will consume crude from its reserves, but there has been a shortage of supplies as the reserve stock has not yet been released. In addition, domestic crude oil production has been steadily declining and demand is rising sharply.
Production has been steadily declining despite the crude oil refinery being given priority by the central government. The highest production of crude oil was 38.1 million metric tons in 2011-12 which has been steadily declining to less than 30 million metric tons in 2020-21. Retail and wholesale inflation is likely to rise in January due to the rise in crude oil.