InvestorQ : Why are oil prices falling so sharply and how will it impact Indian markets?
Dawn Cherian made post

Why are oil prices falling so sharply and how will it impact Indian markets?

Answer
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Dilmini Mercia answered.
7 months ago


Oil prices have been falling consistently on weak demand concerns. In fact, the oil prices have lost more than 30% in the last couple of months since the Chinese virus pandemic started. Brent crude prices fell to a one year low below the level of $53/bbl on Wednesday as the risk of the Coronavirus spreading raised the fears among the oil traders. There were reported cases of the virus in Europe and the Middle East and the IMF has already warned of a distinct slowdown in global growth if the pandemic was not contained immediately. China has already seen its oil demand fall by 25% in the last few weeks and the sharply weak auto sales in China in January are only indicative of the same. Oil has fallen despite indications from OPEC and Russia that they may be looking at steeper supply cuts. That is good for India as it reduces trade deficit but India needs to watch for slowdown risks.