Kolkata: Crude oil prices have slipped below the psychological level of $80 per barrel even before the US Iran peace deal is signed. It is a first since
the first missile rained on Teheran igniting the West Asia crisisand precipitating the worst energy shock in history, sending crude prices as high as $125 per barrel, triggering high inflation and wrecking economies. Brent crude fell 5.4% to touch $78.66, reported agencies. The biggest point of hope is that the Strait of Hormuz will open on Friday and the normal flow of global crude oil and natural gas will start flowing again and gradually rise to pre-war levels. According to reports, significant hurdles still seem to be there in the negotiations including a vital point on Teheran’s nuclear programme but hopes for a long-term solution appear to have taken its grip in the oil and financial markets.
Will petrol, diesel prices come down now?
The quesiton on the lips of most is, with crude prices firmly on its downward journey, will petrol and diesel prices come down now in this country too. While it certainly raises hopes of a cut in the coming months, it cannot go down right now. The reason, the government’s position is that the oil marketing companies are nowhere near their pre-war comfort level of recovery. They have also made huge losses in the past few weeks. It is likely that they are allowed to recover their losses.
Also the government has sacrificed a large part of its revenue when before 1the state assembly elections, it cut excise by Rs 10 per litre on both petrol and diesel to prevent a rise in the pump-level prices. The government is also raising fertiliser subsidies. Therefore, the government will most probably like to recover iots revenues so that the deficit figures can be managed. But if the decline is crude prices is sustainable1, one can hope for a cut in the retail prices of the fuels in the coming months.
Stock markets celebrate
The US stock markets celebrated the drop in crude prices. According to reports, S&P 500 slipped 0.2% following a rally that took it within 1% of its record set earlier in June. The Dow Jones Industrial Average was up 502 points, or 1% at 12:46 pm Eastern time. Nasdaq composite was 0.5% lower. In India too the stock market has been in a celebratory mood since Friday. On Tuesday (June 16) for the third trading session on the trot. At close Sensex stood at 76,808.48, up 0.71% or 544.15 points while Nifty 50 ended the day at 23,989.15, up 0.57% or 135.25 points.
US Fed meeting
One of the major gainers on Wall Street was the SpaceX stocks that surged 12.8% towards a third consecutive rise since its debut on the stock market. It said it will buy Cursor, a popular AI coding assistant, valuing it at USD 60 billion. Yum Brands also rose 2.2% after it said it’s selling the Pizza Hut chain for USD 2.7 billion.
On the other hand, the US Federal Reserve has started its meetings to decide on the interest rates and an announcement can be made today.
