The oil risk

Higher prices may delay economic recovery

Higher crude oil prices have the potential to impede the ongoing recovery in the Indian economy. The price of Brent crude has touched a three-year high of $80 per barrel this week and is expected to remain elevated in the coming months because of a variety of factors. For instance, the supply situation remains tight despite a slower recovery in many parts of the world. The other major factor is a sharp rise in natural gas prices over the last few months. The supply is not keeping pace with demand and the mismatch is likely to exacerbate because of supply