Crude oil prices continue to weaken

10-Aug-11

Crude for September delivery fell by over two dollars to US$79.30 on the Nymex, the lowest settlement since Sept. 29 2011. Prices are falling amid stock market volatility, the first-ever downgrade of the nation’s credit rating by Standard & Poor’s and a slowing economy. This could be good news for consumers, as the drop in oil prices is less a sign of strength than it is an indicator of slowing growth in demand and concerns that the economic recovery is stalling. Indian companies facing the problem of high input cost of crude oil will now be benefited by the fall in commodity prices. Some of the major sectors to benefit from the commodity price tumble include state-run oil refiners and marketers, consumer goods, construction, automobile, pipes and capital goods, transportation and packaging. Ten month low crude oil prices will benefit state-run oil companies- Indian Oil, BPCL, HPCL, ONGC and Oil India- that are currently facing the pressure of fuel subsidy.