What does falling crude prices indicate?

Crude oil prices are again bottoming out, as producers seem to be dicey about the output cut deal's extension. Brent crude prices have fallen almost 11% in March to $50.60 per barrel as of today, while WTI crude has fallen 10% in the same month largely due to a supply glut in the market.

The output cut deal clinched by OPEC members and supported by Non-OPEC countries in November last year led to firming of oil prices, supporting their respective economies. However, increasing supply from US is hurting the producer economies.

OPEC deal of output cut will end in June, and till the time members meet again for extension of the deal, prices are expected to remain under pressure. Analysts expect prices to go down further near $40 levels, indicating a gloomy picture for the oil market.

However, a dropdown in oil prices is again expected to be beneficial for net importers like India. India is poised to gain double benefit from the scenario as currency appreciation and weak oil prices will give required headroom for industrial sector of India.