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Falling Oil Prices


Falling oil prices are good news for oil refiners and companies using hydrocarbon based raw materials.

Falling crude oil prices help contain the import bill of countries like India. And a godsend when we are struggling with lower export earnings.

But there is the danger of salary cuts,layoffs and related problems in producer countries that might ultimately hit certain exports to these countries.

So which countries are likely to be the danger areas ?Take a look at the cost of production figures in various countries and check them against prevailing oil prices.

oil costs

Worse not just high cost countries are facing problems, even low cost ones like Saudi Arabia: Link.(Note the point that foreign remittances by migrant workers is seen as acerbating their problems).There are concerns about remittances from the UAE too: Link. So India may receive fewer remittances from the Gulf to balance its books.

Further fear of contagion is from the speculations in energy futures: Link. And junk oil bonds:Link

 

 

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About Keerthika Singaravel
Engineer,Investor,Businessperson

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