Benign oil prices can provide fillip to multiple sectors, ease inflation

The direct impact on the energy sector should see a positive re-rating for OMCs (despite possible losses on marked-down inventory) since retail margins and refining margins may both improve

Crude oil prices have fallen by nearly 18 per cent since September, despite the conflict in West Asia. This is a positive for India, which depends on energy imports. If this persists, apart from the energy sector, there could be benefits for transport (auto sector, logistics) and it could lead to easing inflation and a reduction in the Current Account Deficit.

The price of the Indian crude basket has dropped from $93 per barrel in September to $77 in early December.

The Bloomberg consensus forecast has Brent pegged at $78 for CY24. This is good for oil marketing companies (OMCs)