New Delhi: The price of crude oil is falling continuously in the international market. If we talk about Brent oil futures, it has slipped below $ 70 per barrel for the first time since December 2021. However, despite the fall in crude oil prices, the shares of government oil companies are seeing a significant decline. ONGC shares have plunged by 2.94 percent, IOC by 3.11 percent and BPCL by 1.49 percent.

Let us know why the price of crude oil is falling and what will be its impact on the Indian economy and the stock market. Also, why the shares of government oil companies are seeing a decline despite the fall in crude.

Why the fall in crude oil?

The biggest reason for the fall in crude oil prices is America and China (US China economic slowdown). Nitin Kedia, founder of Kedia Fincorp, says that there is a possibility of a decrease in the demand for crude oil due to industrial slowdown in China. At the same time, Donald Trump has promised during the election campaign in America that if he becomes the President, he will reduce the limit of Iran's oil production so that its income is reduced and it cannot fund terrorism.

Nitin Kedia says that initially the chances of Trump's victory were quite strong, in such a situation it seemed that Iran's oil production would decrease and challenges would arise on the supply front. But now Trump is facing a tough competition from Kamala Harris and there is hope of his victory. In this situation, there is no scope for much strictness on Iran's oil production. Due to this, the prices of crude are continuously falling.

What will be the impact on the stock market?

If seen overall, the fall in the price of crude oil is very good for the Indian economy. A large part of our import bill goes towards paying the crude oil bill. In such a situation, the fall in crude price will help the government in controlling the fiscal deficit. This also keeps inflation under control. If the government passes on the benefit of cheap crude by reducing the price of petrol and diesel, then many companies can also benefit from this, as their operating costs will be reduced.

However, due to the fall in crude prices, the shares of government oil companies like ONGC are also seeing a decline. Kedia Fincorp founder Nitin Kedia says that its finished product is crude. If the price of crude falls below $ 75 per barrel, it is believed that its earnings per share (EPS) may decrease. However, if the price of crude goes above $ 75, shares like ONGC may see a rise again.