Crude oil cool off

A global recession, if it hits, will be bad for all, including India. For now, though, those concerns are spelling cold relief by helping cool demand expectations and, in turn, prices of crude oil, which on Thursday slid to a 15-month low. Brent traded below $75 per barrel and US WTI closer to $70 per barrel. Some of this may be part of the volatility set off by bank weaknesses coming to light, with major central banks in a scramble to shore them up. After the Fed acted in the US, Switzerland’s monetary authority on Thursday opened a window for troubled Credit Suisse to borrow up to $54 billion. But high oil inventory levels are also helping soften prices. So far, New Delhi has shielded India’s economy from the Ukraine war oil shock by buying discounted Russian crude, although our gains have been found to be less impressive than first assumed. We import more than four-fifths of our oil needs, and any easing of cost pressures is welcome. The Reserve Bank of India’s current inflation forecasts assume a $95-per-barrel price level. If actual prices stay lower, it would brighten the chances of a rate-hike breather as overall retail price stability will get easier to achieve.