Fears of price rise keep oil firms on edge

Indian oil majors are keeping their fingers crossed as the price of crude brents Dubai and West Texas intermediate (WTI) are heading north.

Dubai brent has touched $ 60.28 per barrel today and WTI brent is at $ 67.86 per barrel. However, despite the rise in WTI and Dubai, crude brent UK has declined to $ 63.91 per barrel from last day's close at $ 64.22.

At New York Mercantile Exchange (NYMEX), light sweet crude for March delivery was at $ 67.45 a barrel, still shy of the record high of $70.85 last August.

The prices had fallen after top exporter Saudi Arabia vowed to pump in more oil. Moreover, in its next meeting, Opec is not expected to cut its production. Last week NYMEX price came close to $ 70, due to political uncertainties in Iran and ongoing militancy in Nigeria.

Analysts said prices will surge to $ 90-100 per barrel if conditions worsen. "Oil prices were higher in Asian trade on continued worries over security and political unrest in key producers such as Nigeria and Iran. Unrest in Nigeria has already disrupted production the country, while simmering tensions between Iran and the West over Tehran's nuclear programme were also at play," an industry analyst said.

The last three month's low price of Dubai and WTI was recorded on November 16 and 19, respectively. Dubai price had come down to $ 49.46 and the WTI price slipped to $ 55.5 a barrel. In UK, the price dipped to $ 51.91.

Analysts expect various political developments pushing crude oil price to a new high.

"Further ahead, the market appears to be taking a bullish view of demand growth and Opec is trying to raise the price. This will continue through out the year, thus the price is expected to go up further, even though it is showing marginal decline trend," analysts said.

"Developed nations are not be doing enough to restrain oil producing countries from pushing up prices. Oil prices will hurt developing countries," recently finance minister P Chidambaram commented on the price rise.