Kolkata, March 11:
Oil prices are likely to remain low and might not cross $100 a barrel in a decade, helping the Indian government control inflation, a market researcher said here on Wednesday.
According to Edelweiss Financial Services’s associate director and research head Vinay Khattar, the inflation in the country has been contained and is likely to remain low as oil prices in the international market would stabilise at low prices.
“The fracking technology (used to mine gas from shale rocks) has undergone revolutionary changes and companies are now concentrating on mining more oil and gas from the existing wells by implementing new technologies,” Khattar told reporters here.
He said the average recovery rate for shale gas and oil is climbing to 55-60 percent from the previous 25-30 percent, thereby increasing the productivity of the existing mines while companies are refraining from exploring new oil fields.
Added to this, the oil producing Middle East nations as well as USA and Russia are unlikely to curb oil production even if prices head south.
Khattar said since oil prices will remain low over the decade, Indian economy is poised to benefit from the low oil prices.
India’s oil import bill alone for 2013-14 stood at $150 million.
The low oil prices will help the economy stabilise and open up for growth.
The researcher said inflation in the country is under control and the macro-economic scenario is likely to remain stable for growth.
“Everything that was going against India for the last seven to eight years are beginning to fall back in place… our sense is inflation is down for good at least for eight (coming) years,” he said.
The financial advisory firm said the global oil market is estimated at 94 million barrels per day with the US consuming 21 million barrels. Saudi Arabia is now the largest oil producer with about 9 million barrels comprising 10 percent of the global oil production. IANS