Crude Oil Mixed In Asia With Iran Economic Sanctions Waivers In Focus.
Brent crude futures, the international benchmark for oil prices, touched US$68 on Tuesday. This is on the back of production cuts led by the OPEC and expectations that the US crude inventories had dropped to an eight-week low.
The market already saw a tightening supply due to the OPEC-led production cuts. The OPEC is expected to extend a cut of approximately 1.8 million barrels per day through 2018.
The rising oil price is not good news from India's perspective. For India, it may mean a deteriorating current account deficit.
Similarly, since fuel prices are not regulated anymore, oil marketing companies do a daily revision of petrol and diesel prices, in tandem with international rates.
This will impact inflation. This pressurises the monetary policy. And, if crude oil prices remain high, there will be a change in the trade dynamics affecting the trade deficit, which in turn will influence the direction of the rupee's movement that's presently quite strong.