Shehbaz govt may reduce petrol, diesel prices by Rs5

Islamabad: The Shehbaz-led government is likely to reduce the prices of petrol and diesel by Rs5 per litre each from June 1, 2024, sources claimed on Monday.

The Oil and Gas Regulatory Authority (Ogra) will send a summary to the petroleum division on May 31 for the proposed reduction. The government earlier reduced the per litre price of petrol by Rs15.39 and diesel by Rs7.88 on May 15 for the next fortnight.

Global oil prices were little changed on Monday, making marginal advances in muted trade owing to public holidays in Britain and the United States after a downbeat week characterised by the outlook for U.S. interest rates in the face of sticky inflation.

The Brent crude July contract was up 21 cents at $82.33 a barrel by 0926 GMT. The more active August contract rose 26 cents to $82.10. U.S. West Texas Intermediate (WTI) crude futures were up 23 cents at $77.95.

Brent lost about 2% last week and WTI nearly 3% after Federal Reserve minutes showed some officials would be willing to raise interest rates further if it were deemed necessary to control stubbornly high inflation.

"Sentiment in the oil complex ... has been skittish as investors are constantly recalibrating expectations for the Federal Reserve’s monetary policy trajectory," said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Recent data emanating from Western economies has shifted rate-cut expectations depending on geography.

The European Central Bank is likely to make a cut in June while investors are braced for higher-for-longer U.S. rates, Bank of America analysts said on Friday.

The U.S. personal consumption expenditures (PCE) index expected this week will be in the spotlight for further signals about interest rate policy. The index, due to be released on May 31, is viewed as the U.S. Federal Reserve's preferred measure of inflation.

German inflation data on Wednesday and eurozone readings on Friday will also be watched for signs of a European rate cut that traders have pencilled in for next week.

Eyes will also be trained on the coming meeting of the OPEC+ group of oil producers comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia. The meeting is to take place online on June 2.

An extension to output cuts of 2.2 million barrels per day is the likely outcome, OPEC+ sources have said this month.

-- Addition input from Reuters