Editor’s Take: What’s driving the surge in crude oil? How this is good overall? Anil Singhvi Decodes

In the special edition of Editor’s Take, Zee Business Managing Editor Anil Singhvi explained how rising crude oil across the globe is a good indication. However, it will dent the import bill of India, he said. He also decodes the fall in the US markets on Monday, and how should it be viewed.

Speaking on the crude oil price rise, which jumped 2.5 per cent to breach $81 per barrel, Singhvi says, this surge in oil is concerning at both global and domestics level. This will certainly burden India’s import bill and may give rise to inflation, as interest rates would eventually increase.

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Besides, other commodities such as iron and steel are strengthening; commodities prices which were down for quite some time has gained in the last one week and commodities inflation is a big worry for global markets and for us as well, points out the managing editor.

He mentions the best part about this rise in crude oil is that it shows the economy is returning back to normalcy. The rise in crude oil price is not due to the geopolitical situation but rather due to the rise in economic activity and eventually, the surge in demand, observed the market guru. 

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OPEC+ will increase their output, however, expectations were that they should increase the production amid economic recovery and demand rise, Singhvi affirms. He adds, the energy sources are less, while natural gas prices are increasing, even coal price surging and now crude oil.

On the US markets, Singhvi says, it is a range-bound in nature, wherein a profit booking is witnessed at the higher-end and buying is visible at the lower end, this is natural and obvious. He says, the trigger for profit booking and buying could be multiple, he cites one such reason as the Facebook outage.

In an apparent range-bound market, once we see a good downside level is being reached, the market would bounce back, adds the managing editor. During Monday’s session, the US tech stocks such as Facebook were down 5 per cent, while Apple, Alphabet, and Amazon slipped 2 per cent each.