Festive Boost: India's Oil Demand Set to Climb Amid Elections and Marriages

India's oil demand poised for growth in Q4 of 2023 due to festivals and elections, despite a rainy monsoon impacting earlier consumption. S&P forecasts a 3.5-4% year-over-year increase, driven by gasoline and diesel. Global price volatility persists amid geopolitical tensions, says India's Petroleum Minister.

India's oil demand is set to rise in the fourth quarter of 2023, bolstered by festival celebrations, agricultural activities, and a rebound in consumption following a rainy monsoon season. According to S&P Global Commodity Insights, the demand, which saw a decline in September, is projected to grow by 3.5-4% year-over-year by December.

The excessive monsoon rains earlier this year affected vital sectors, including road transportation and construction, contributing to subdued oil consumption. Himi Srivastava, South Asia oil analyst at S&P Global Commodity Insights, highlighted that gasoline and diesel demand is expected to increase by 50,000-55,000 barrels per day, although northeast monsoon rains might dampen demand slightly.

The marriage season and state elections in regions like Maharashtra and Jharkhand are anticipated to further drive transportation fuel demand. While global oil prices remain volatile due to geopolitical conflicts, minister Hardeep Singh Puri assured that there is no oil shortage and prices are expected to decrease soon, citing global production cuts and regional tensions as factors affecting the market.

(With inputs from agencies.)