Oil goes sub-$48 a barrel

Continuing its ongoing plunge, the Indian basket of crude oils fell to $47.85 a barrel on the previous trading day on Tuesday, after having gone below the psychological $50-a-barrel mark last week for the second time this year from levels of over $100 last year.

The basket of 12 crude oils of the Organisation of Petroleum Exporting Countries (OPEC) closed at $45.77 for a barrel of nearly 160 litres on Tuesday, compared to $45.96 on Monday.

Western Canadian crude, a heavier type of crude that is more difficult to refine, is currently trading in the $20 range, provoking analysts to speculate on the commodity trading as low as as $15 a barrel in the not too distant future.

The Indian basket, made up of 73 percent "sour" grade crude from Oman and Dubai and the balance by "sweet" grade Brent, fell to its lowest of $43.36 in January, provoking the Reserve Bank of India to make the first of its interest rate cuts this year after almost two years.

At the RBI's monetary policy review last earlier this month, Governor Raghuram Rajan said the fall in oil prices has been very beneficial for the country.

One of the reasons for the strength of the Indian rupee is the falling price of oil which has brought down the current account deficit, he said.

Pointing to the adequate rainfall in most parts of the country bringing expectations of a good harvest, Finance Minister Arun Jaitley on Tuesday hoped the Reserve Bank, which held its key interest rate at 7.25 percent earlier this month, would take note of inflation lowering in the last four months.

"Lowering (crude) oil and commodity prices are a good opportunity for India," Jaitley said at a Small Industries Development Bank of India (SIDBI) event in Mumbai.