In a special edition of Editor’s Take, Zee Business Managing Editor Anil Singhvi said that the crude oil shall be a trigger point for the Indian market as it comes in double-digit and estimated that the oil should see more softening of between $ 12-15 on Monday.
Singhvi said, the US Fed rate hike has pushed the American economy towards recession, which is inevitable, and many Fed members are late to predict it. The US Fed on Thursday announced the biggest rate hike of 75 basis points in over three decades to bring inflation down to 2 from 8.5 per cent.
According to the managing editor, the US Fed will have to take a lot of effort and a slew of measures to control the rising inflation. Global inflation, including the US, has been struck mainly due to the Russia-Ukraine war crisis, which has also pushed the commodity prices, including crude oil, to a higher level.
India’s condition with respect to inflation is good comparatively, however, some pockets of the economy see a little pressure, the managing editor added.
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Crude oil prices tumbled about 7 per cent to a four-week low on Friday on worries that interest rate hikes by major central banks could slow the global economy and cut demand for energy, according to a Reuters report.
Also pressuring prices, the US dollar last week rose to its highest level since December 2002 against a basket of currencies, making oil more expensive for buyers using other currencies, the report said.
Singhvi said this softness in crude is mainly due to the recession fears in the US and also some global parts. He said due to recission the demand decline and so the prices dipped.
This softness is good news for India and its economy, however, it is not a permanent one, Singhvi said, adding further that only the end of the Russia-Ukraine war could give permanent relief from higher crude oil prices.