Now, brace for some crude shocks; Jim Rogers sees oil price at $60

After demonetisation and Fed rate hike fears, brace for a crude shock now.

Crude oil prices breached the $50 a barrel level on Wednesday following the Opec deal to cap production from January. And now, commodity guru Jim Rogers says crude oil prices could soon head towards $60 a barrel level.

Remember, India's oil import bill for this financial year has been pegged at $66 billion at an average import price of $48 A barrel. India, which depends on imports to meet 80 per cent of its oil needs, will have to spend Rs 9,126 crore ($1.36 billion) more a year for every one dollar a barrel increase in crude oil.
India spent $63.96 billion on crude oil import in 2015-16, about half of the $112.7 billion outgo in the previous financial year and $143 billion in 2013-14.

On Thursday, crude prices were trading at a six-week high of $51.13 a barrel level, up 1.4 per cent over its previous close.

Fund managers and strategists on Dalal Street say should oil prices rise beyond $55-60 a barrel, it could pose a risk to India's economic growth estimates as well.
"An increase in crude oil prices could be a double-edged sword for emerging market equities, which are under pressure due to weak growth and lower fund flows from sovereign wealth funds.

We expect pressure on (India's) fiscal as well as inflation if crude crosses $55-60 a barrel level," Manishi Raychaudhuri, Asia Pacific Equity Strategist, BNP Paribas, had said earlier this year.

- Source, ET