The battle between authoritarian states and democracies in the new Cold War is centered around petroleum as a weapon. However, higher oil prices caused by output cuts by Russia and Saudi Arabia may backfire on them. China, the largest source of additional oil demand, is at a crucial moment in its energy transition and its gasoline demand is expected to peak this year. Every dollar added to the oil price will lead to a faster drop in long-term demand from their most important market, including India.
Oil prices in the near term are overbought on the charts but the momentum is on the higher side, say market experts. They believe that if China s demand comes back strong then the crude could spike to $100, but not stay there as India and the US are headed to elections soon
There was no clear consensus on how the various influences would play out when the oil industry held its annual gathering this week in Asia, the top-importing region and the likely driver of global crude oil demand for the coming years.
"Historically, September and October have been the months when there is a seasonal downturn in overall demand. And we have a price rally just as we speak. So it feels very odd because there is much more than just pent-up optimism about China finally looking robust. It is effectively permeating the oil prices even though the supply and demand fundamentals should not really reflect it."
The petrol price in Pakistan reached a level of Rs 272.95 per litre in merely 16-month long Pakistan Democratic Movement (PDM) government, registering a rise of Rs 123.09.