Crude oil prices decline: How it will impact the equity market, reasons for the fall, sectors to be affected and more
Brent crude futures rose 27 cents, or 0.4%, to $74.56 a barrel by 0613 GMT on December 7. US West Texas Intermediate crude futures rose 24 cents, also 0.4%, to $69.62 a barrel, according to a report by Reuters. Oil prices settled on December 6 at the lowest level since June, falling around USD 25 from their September highs amid concerns over oversupply and weaker demand.
WTI fell by 4 per cent, closing at USD 69 per barrel. Brent crude was down more than 3.6 per cent, closing at USD 74 per barrel level. Crude has come under downward pressure since last week's meeting of the Organization of Petroleum Exporting Countries (OPEC) that discussed how the package of voluntary cuts will be carried out.
Saudi Arabia mentioned that cuts by OPEC would be honoured in full and could be extended, pushing back against persistent scepticism over the curb's effectiveness, according to various reports. Speaking about how reduced oil prices can ease inflation and current account deficit, Aamar Deo Singh, Head Advisory, Angel One Ltd, said, "With energy prices dropping, inflationary fears have subsided, and central bank rate hikes are unlikely. These main underlying drivers are adding fuel to the already positive sentiment, which is reflected in the market's overall surge." "The benchmark index, the Nifty50, is up 15% year to date, indicating that both domestic and foreign investors continue to be bullish on India.
Going forward, if crude oil prices continue to fall, it bodes positively for the markets because the chance of future rate cuts increases, which would be a boost to the economy," he told Mint. Amit Goel, co-founder and chief global strategist of PACE 360, echoed Singh's perspective on the impact of crude oil prices. "Sectors such
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