Anand Tandon, Independent Analyst, says “going forward, oil is something that one needs to watch out for. We should be expecting an increase in energy costs because of the fact that despite subdued production, despite the fact that there are global issues which are preventing free flow of oil, despite all of that, the prices were remaining well under control and we had significant cutback in terms of production, I think that will now begin to show up in higher prices as we are already seeing.”
It seems the markets are ignoring what is happening in the commodity universe so far. Do you think if crude goes above $90, the equity markets will begin to feel the heat?
Anand Tandon: Well, yes, there is no doubt that if the oil prices were to continue to sustain higher, there will be some pressure on the economy. For now, at least, the quarter that has just ended will actually show commodity prices being relatively lower and therefore, most of the manufacturing companies will show increased operating margin.
But going forward, oil is something that one needs to watch out for. I have been saying that we should be expecting an increase in energy costs because of the fact that despite subdued production, despite the fact that there are global issues which are preventing free
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