Jagran Business Explain: Oil prices deteriorating Worldwide. Fear of recession. What's next?

The sharp fall in the price of crude oil on Wednesday has added to the worries of the traders, whose effect is also visible on the market. Watch our special report to know what will happen next. 

On June 20, shares of Oil and Natural Gas Corporation and Oil India fell, mirroring the sharp drop in global crude oil prices.

Brent crude oil prices fell more than 5% on Friday and have fallen nearly 10% in the last few days due to growing concerns about global demand for the commodity.

Despite persistent supply-side issues, rising bets on a recession in the United States and the European Union over the next 12 months, as well as slowing demand in China, have forced traders to reduce their optimism for the commodity.

How much are the Oil Prices?

- Oil prices down by about 5% today

- Oil prices fell by about 15% in the last 1 week

- WTI crude prices fall from $120 to $105/bbl

Reason for Price Fall in Oil

- Today US President can cut tax on oil

- Tax exemption of 18.40 Cents/Gallon possible on US oil prices

State tax deduction is also possible in America

Tax exemption expected to stop rising inflation in America

- Impact on oil demand due to fears of recession in America

America is the world's largest oil consumer

Europe also imported more in June than in May

- Europe increased imports despite banning oil imports on Russia

Impact of Oil Prices Fall on India

India has a big advantage due to the fall in oil prices. India has to import 85% of its oil requirement. Oil accounts for about 20% of India's total import bill. Indian oil companies will get big relief. 

- Loss of 15-25 rupees / litre on petrol-diesel sales to oil companies

- Price volatility of $10/bbl impacts inflation by 0.30%