3 reasons why the fall in crude oil prices may not be good news for India

The fall in oil prices comes at a time when the global economy is already reeling under the impact of coronavirus, which has dented demand across sectors and economies

The 30 per cent drop in Brent oil prices on Monday to $30 a barrel may not be good news for the economy, said analysts at Morgan Stanley, who believe the gains will remain capped due to the overall weakness in the economy given the coronavirus-related health scare.

The decline in oil prices, they believe, will negatively impact the capex outlook for oil related sectors as well as oil producing countries. That apart, credit markets in the US as well as for emerging market (EM) oil producers will likely react negatively, leading to a further tightening of financial conditions.

“Indeed,