InvestorQ : Why are crude prices once again spiking globally and what does that mean for India?
Mitali Bhutta made post

Why are crude prices once again spiking globally and what does that mean for India?

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3 months ago
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After correcting down to $66/bbl, the price of Brent Crude is back close to the $80 mark, a level that should worry the Indian economy due to its implications for domestic fuel prices, inflation and trade deficit. On the MCX, the futures price of crude spiked above Rs.5,535 per barrel in tandem with the global Brent Crude prices crossing $78/bbl. This is one of the highest levels seen in the last couple of years in the global crude market.

Oil prices have been rising on the back of consistently increasing demand even as supply has failed to keep pace. On the one hand the OPEC is struggling to meet its enhanced quotas and on the other hand, the US oil output has been hit badly by the hurricanes disrupting movement in the Gulf of Mexico. The lower supply from Gulf of Mexico resulted in larger inventory drawdowns in the US which actually triggered the sharp rise in crude prices.

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