The Plummeting of Oil Prices--------------------- There are different theories doing the rounds about the steep decline in global oil prices.Saudi Arabia ,the biggest player in worlds crude oil market and the largest exporter of the total petroleum liquids in the World is believed to be indulged in keeping the oil prices at lower level wittingly in an effort to counter and deescalate U S and Iran. In an attempt to lay the trap , they have also declined to slash the production of oil. In last six years , U S has stepped up its oil production by 70%. Iran and Russia too have beefed up remarkably in oil production to pose serious threat to the supremacy of Saudi Arab. But the other side of the ground reality is that in order to forbid it self from engulfing the pride,they are not realizing its cascading effects.They will not be able to bridge their budget deficits and high spending in a soothing manner. But it is good news and pleasant happening for India.since ours is a oil starved economy,.the subsidy burden will most likely to ease a lot.besides bringing its current account deficit down by 0.6 % of G D P .The oil imports is growing at an average of 14% p a. and it had accounted 36 % of total imports last year. Inflation is also likely to remain muted which will boost the hopes of R B I to commence rate cut season and that will eventually perk up our G D P
Posted on: Sat, 01 Nov 2014 12:07:00 +0000
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