Government of the UK cuts the fuel duty by 5p
Rishi Sunak,
the Chancellor of the Exchequer of the United Kingdom, reduced the fuel duty by
5p while presenting his Spring Statement in the Parliament today.
The price of
crude oil, however, did not immediately come down after the announcement. On
the contrary, the prices of crude oil went up - actually.
As of 14:15 GMT,
the price of WTI and Brent were trading at $114.04 and $120.67 respectively;
the price of LNG was at $5.25.
Undoubtedly,
the oil companies will come under pressure to pass on the savings to the beleaguered
customers; the British government has been compelled to take the measure at a
time when the inflation has hit 30-year high, with the price of oil at the
pumps are rising fast triggering off a cascade of disturbing economic spectre.
It is not
just the government in the UK that feels the pinch; it is just universal
regardless of the relative economic strength of the country in question.
The us crude
oil inventories, meanwhile, has fallen last week according to the data from the
API, American Petroleum Institute, experiencing a build in the previous two
weeks: it was a substantial fall of 4.28 million barrels when the forecast was
a build of 25,000 barrels.
Analysts are
surprised at the development, having warned the markets about the onset of the so-called
demand destruction in light of steep rises in price of crude oil; the EIA, US
Energy Information Administration, is expected to release its own data on the
US crude oil stocks today.
The UAE and
Saudi Arabia that resisted succumbing to the Western pressure in increasing oil
production, do not show any enthusiasm to flood the markets with extra oil;
they had been anxiously watching the talks over the revival of the JCPOA, 2015 Iranian
nuclear deal, which has stalled – once again - without a deal being struck; in
addition, they, along with Israel, are keen to know whether the relations between
the US and Iran will improve in the event of salvaging the nuclear deal.
Both the UAE
and Saudi Arabia are under regular threats from the drones and missiles, fired
from Yemen by Houthis. Although the US condemns the attacks, it has already withdrawn
the Patriotic defence system from Saudi Arabia for reasons known only to the
Saudis and the US; the Kingdom has been forced to borrow anti-missile batteries
from Greece in order to keep the Houthi threat at bay.
When the Houthis
hit the Saudi oil installations this week, Saudi Arabia said that the Kingdom
was not at fault in the event of global oil supply being disrupted.
The
sanctions against Russia, meanwhile, according to some analysts, are not
producing the desired effect on the Russian state. Since major global consumers
such as India and China keep buying oil from Russia, offered at a heavily
discounted rate, Russia still can earn significant revenue from the commodity
at present – much to dismay of the West, of course. The rest of the countries
in the region, apart from some staunch US allies, still buy oil from Russia.
All in all, although
the price of crude oil is not a factor that determines the outcome of the war
between Russia and Ukraine, it still can leverage how far the involvement of
the West in the conflict is going to go deep.
