The price of crude oil crashed! US – Iran Recession News Brings Prices Down Big; Petrol Diesel will be cheaper?

• A massive selloff in the market
• What other factors increased the pressure?
• What can happen next?

Crude Oil Rate: Crude oil prices witnessed a sharp decline on Wednesday. Brent crude, the global benchmark, fell 7 percent to trade at $102.22 a barrel. Meanwhile, US crude oil WTI prices also recorded a decline of more than 7 percent. West Texas Intermediate is currently trading at $94.36, down nearly 8 percent. This story of oil prices is not limited to one particular commodity; So it has a direct impact on inflation, stock market, currency value and common man’s pocket. As a result, this decline becomes an important signal not only for traders, but for the economy as a whole. So, how will the effect of these factors be seen? One mistake of Auto Pay and Bank Account will be ‘Zero’! Don’t ignore ‘these’ things

A massive selloff in the market

The main reason behind the decline is news of easing tensions between the US and Iran. There are indications that the two nations are on the verge of a preliminary agreement. Donald Trump has also hinted that the US is temporarily suspending its “Project Freedom” naval campaign. This was the mission under which ships were provided security in the ‘Strait of Hormuz’. This sea route is crucial for supplying about 20 percent of the world’s total oil supply. The easing of tensions in the region means that fears of oil supply disruptions have now subsided. As these fears subsided, the market experienced a massive sell-off.

What other factors increased the pressure?

In the recent past, oil prices had seen a sharp rise. As a result, many investors started profit booking, which put further downward pressure on prices. Moreover, there were fears that earlier high prices would adversely affect demand. But now, with prices trending downwards, the market is expecting that demand will gradually return to the previous level.

Effects on Markets

The fall in oil prices also reflected in the stock market. Indian markets closed higher. The BSE Sensex saw a huge gain of around 940 points, while the Nifty 50 also saw an average gain of 298 points. Lower oil prices reduce companies’ operating costs; As a result, the expectation of increasing their profits increases. Due to this reason, the buying force increased in the market once again.

What can happen next?

If the deal between the US and Iran moves forward and the situation fully stabilises, oil supplies could increase further. This is likely to lead to further moderation in prices. But the supply will not be fully restored immediately. However, the panic that had gripped the market has now subsided. This huge fall in prices is the result of this.

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