EMERGING MARKETS WEEK-Oil price drop could lead markets higher

By Daniel Bases

NEW YORK, July 20 (Reuters) - Falling oil prices may be just what the doctor ordered for emerging markets in the coming week, even though many such economies rely on high energy prices to fill government coffers.

On the surface, a drop in commodity prices will mean governments and corporations will not take in as much cash.

But falling prices translating into a drop in inflation might be even more important for their long-term health, argues one fund manager.

Countries from Venezuela to Russia to Nigeria have benefited from high oil prices while Argentina and Brazil, for example, have gained from high commodity prices.

On Friday, New York crude oil prices continued their recent slide, closing at $128.88 a barrel, down 11.23 percent from Monday's settlement price.

In dollar terms, New York crude marked its biggest weekly price drop ever when Friday's session low of $128.23 is compared with the record intraday high of $147.27 set on July 11; on that basis, the price of oil in New York fell $19.04, or 13 percent, last week.

"One of my worries has been that high commodity prices cause inflation and ultimately a global recession. If oil prices ease, like they are right now, it is actually more long-term positive for these exporters," said Gunter Heiland, co-head of the JPMorgan Asset Management emerging market debt team in New York.

"With less inflation and less of a chance of a global recession, these countries can continue to flourish as they have been. The obvious but incorrect assessment is that a pullback in oil prices is a negative," he added.