India's crude oil basket hits all-time high

The Indian basket of crude oil has scaled an all-time high this week. The basket, consisting of Oman-Dubai grade of sour crude and Brent dated sweet crude in 57:42 ratio, touched its highest ever level at $46.23 a barrel on February 28.

It was just $43.88 per barrel even during October 2004, the worst month in oil history, when the WTI crude oil scaled an all-time high of $56.4 a barrel.

Petroleum Minister Mani Shankar Aiyar today said the international oil prices were expected to ease with the winter demand subsiding.

Speaking on the sidelines of an oil conference today, Aiyar said, "I hope that the new US administration's economic policy and the subsiding of winter demand will have a major impact on the international prices. In the longer term, the twin factors will stabilise prices at levels lower than last year's."

The February average of Indian basket of crude oil was $42.67 a barrel, slightly lower than the October 2004 average of $43.88 per barrel. It lowered to $38.82 per barrel in November and further to $36.82 a barrel in December. However, since January, when the Indian basket rose to $41.01 a barrel, the prices have been firming up.

On the visit of Venezuelan President Chavez Frias, Aiyar said the two sides would discuss opportunities for exploring oil and gas in Venezuela when the country's president arrives here on a visit tomorrow.

"Venezuela looks upon India as an important upcoming partner in hydrocarbon sector. We will sign an MoU for wider and deeper cooperation in hydrocarbon sector," he said.

Venezuela had last year offered five oil fields for exploration and production to ONGC Videsh Ltd through its national oil company PDVSA. Two of these were exploration blocks and three development blocks.

Earlier speaking at the conference, Aiyar stressed upon the need for creating a national data and technology repository where information on geology and characteristics of basins and various blocks could be stored for access by anyone.

All companies, private and public sector, would be obliged to deposit their geological data in the data bank as also technology specific to Indian basins would be collected for use in prospecting for oil and gas in India and abroad and securing energy security for the nation.

What is India's crude oil basket
It is the composition of India's crude oil imports. The import basket consists of Oman-Dubai grade of sour crude and Brent dated sweet crude in 57:42 ratio

What is the cause for worry
Fluctuations in global prices, since India is a large importer. However, the import price was just $43.88 per barrel during October 2004, the worst month in oil history

Signs of hope
US govt's economic policy and the subsiding of winter demand of heating fuel