A correlation analysis was done to see the linkage between crude oil prices, the rupee, and Nifty50 over the last 25 years. The ongoing Russia-Ukraine conflict has once again moved the spotlight on crude oil prices even as stock prices crashed and the rupee depreciated sharply.
The increase in international rates not only affects trade and inflation but also ruins companies’ profitability and stock prices as well. Crude oil prices should therefore move in the opposite direction of the rupee and the Nifty50. The prices of everyday essentials have been steadily rising for almost a year owing to hikes in fuel prices, supply-chain constraints, and global shortages of products.
How Does Crude Oil Affect Investors and Consumers?
Investors and consumers review crude oil from different perspectives. Investors are also consumers in some ways, but their investing side loves it when their oil prices are much higher than their consumer side does. On the other hand, consumers get really terrified when the oil price rises.
Investors: There could be so many ways to invest in oil, but not for those who are easily frightened. As we all know, oil prices are fluctuating and they are so difficult to predict. Crude oil futures could be on an agreed basis to sell and buy at specific dates and at specific rates. Businesses use them to fix the price of oil they need for the future. Traders could never take guardianship but could gently sell contracts at the expiration dates.
Oil exchanging trade funds would be easier to invest in than oil futures. Even if oil prices are rising, the ETF prices could fall if investors pull funds from the oil company’s stocks.
Consumers: Crude Oil It mostly affects consumers because it takes oil to get them the products and services they need. For example, higher transportation costs and higher food prices in the stores in your neighborhood. You’ll also pay more for gas to get to work or take the kids to practice. Higher oil prices mean that you’ll have less money to pay for other expenses or luxury items.
