International oil indexes, like the Brent Crude, fell more than one per cent on Tuesday (13 November), registering a close below $70 per barrel, as reported by Mint. Even the WTI (West Texas Intermediate) also fell below $60.
This comes after the US President Donald Trump put pressure on OPEC to not cut supply as this would have raised oil prices again. OPEC (Organization of Petroleum Exporting Countries) is a cartel of around 15 countries that hugely influences international oil prices.
On 12 November, Trump took to Twitter asking the OPEC to keep the supply flowing.
Commenting on the reduced volatility in oil prices, Investment Banking firm, Merill Lynch, stated, “Sky-high production in the US, coupled with incremental barrels coming from Saudi Arabia and Russia is starting to impact oil market balances. As such, crude oil inventories are starting to increase once again.”
International oil prices have a huge impact on India’s fiscal math since oil imports contribute heavily to the country's widening fiscal deficit. Every $10 rise in international oil prices brings down India’s GDP by 0.3 per cent. Also, rising oil prices have contributed to the turmoil in rupee's value in recent months.
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