Brent crude oil price has been decreasing steadily & now hovering around US$ 97 which was around $113 per barrel in June 14 . The key reason are healthy supply, dip in consumption growth in key markets such as China and also a cut in global demand forecast by the International Energy Agency.
The price dip is very crucial for India, which would show up positively on five fronts:
1. Exchange rate,
2. inflation,
3. current account and
4. fiscal deficits,
5. and investor sentiment.
Oil marketing companies under recoveries has been decreasing which will result into lower oil subsidy for government and will help to achieve the target of 4.1 fiscal deficit target of FY 15
Every $1 decline in crude prices brings down the current account deficit by about $1bn. The nearly $10 per barrel decline can therefore drive a substantial improvement in the current account
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