Crude oil prices triumph
a fresh five-month high on Tuesday after the Trump administration definite to
not extend the waiver that it had approved to India and seven other countries
on Iranian oil imports beyond the May 2 deadline. Predictors say crude prices
may rise to the $80-85 range in the short term, but it remains to be seen if
such a rally can sustain for long. On Tuesday, Brent futures for June
delivery traded 0.6 per cent higher at 74.51 a barrel, up 37 per cent from the
December 31 price of $54.57 a barrel. The
US curbs do not bode well for India, a key importer of Iranian crude, and the
impact could be felt across the economy and financial markets. Domestic equity
indices tanked on Monday after the first report about the US decision. The
indices had seen a smart rally thanks to a Rs 63,000 crore inflow of foreign
portfolio investment so far this almanac. Should the crude rally persist, it will
put pressure on the domestic rupee, which will in turn slow down FII flows.
Umesh Mehta of SAMCO Securities says commodities always make tops on fears of short supplies. Given the accounts, the oil rally this time doesn’t seem sustainable.
No misgiving, the spear in crude oil prices is impacting the economy adversely, but unless crude oil prices touch an extreme point, stock prices would not see too much of uproar, he said. Manglik said there is no fixed threshold level one should watch out for, as the bearing of rising crude prices largely depends on how the government tackles the situation. Rising crude oil prices has a negative impact on the overall Indian economy and, thus, one should keep an eye on oil-linked sectors. YES Securities said the breakeven production price for US Bakken crude oil is assessed to be around $42 a barrel, which is reasonably lower than present prices.
Umesh Mehta of SAMCO Securities says commodities always make tops on fears of short supplies. Given the accounts, the oil rally this time doesn’t seem sustainable.
No misgiving, the spear in crude oil prices is impacting the economy adversely, but unless crude oil prices touch an extreme point, stock prices would not see too much of uproar, he said. Manglik said there is no fixed threshold level one should watch out for, as the bearing of rising crude prices largely depends on how the government tackles the situation. Rising crude oil prices has a negative impact on the overall Indian economy and, thus, one should keep an eye on oil-linked sectors. YES Securities said the breakeven production price for US Bakken crude oil is assessed to be around $42 a barrel, which is reasonably lower than present prices.
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