Commodity Talk: Crude oil may remain above $95/BBL on steady demand, supply squeeze: Navneet Damani of MOFSL
India is the world’s 3rd largest oil importer and the rise above $95 could bring back inflation fears and put pressure on India's fiscal math. India’s current account deficit can widen, thus weakening its currency, says Navneet Damani, Head of Commodity & Currency Research at Motilal Oswal Financial Services.
Considering the current trends in crude oil prices, where do you see Brent/WTI price targets in the near term and for the year 2023?
Oil prices have been on a roll trading at 10 months highs recently, as Chinese central banks have been cutting cash reserve requirements to boost its economic recovery, expectations of peaking interest rate cycles by major central banks along with output cuts driven by Saudi Arabia and Russia amid record global consumption. Prices got a further boost after the IEA warned that continued supply cuts by the two OPEC+ leaders are likely to create a “significant supply shortfall” and threaten further price volatility.
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Crude oil prices are expected to remain above $95 in the near term as supply tightness will rule the market sentiments. Any surprise push by China and reports by OPEC+ for a further extension can drive prices higher. On the risk front, Iran still remains a major wildcard along with inflation risk which can drive central banks to hike rates next year if the situation persists.
While OPEC issued an update that the demand for oil will remain robust during the year amid likelihood of supply deficit, how wide will this gap be in your
