Standard Post with Image

Falling Crude Oil Prices: Disparate Impact on Indian O&G Value chain

News

Brent crude oil prices have dropped by 17% to around $57 per barrel from the year’s high of $69.02 a barrel on 6 May. But despite that steep decline, Brent continues to trade 7% higher from the year’s low of $53.52 a barrel reached on 20 January. Nevertheless, the outlook on crude oil prices is subdued, with expectations of weak demand from China as well as Europe.

Source:  ET

SNP Insights

Knock on effect of falling crude oil prices will be reduction on current account expenditure & reduced subsidy burden on government. Oil marketing companies like BPCL, HPCL & lubricant companies may turn out to be major gainer of price reduction. But upstream player of O&G value chain may face the heat due to price reduction along with some impact on oil refiners for their loss of revenue due to inventory losses. It would be interesting to see price trend of crude oil in next few months & their range of impacts on different value chain partner at due course of time.

Source: SNP Infra Research