In the near term, Brent and WTI crude oil prices could rise by around 4-5%, reaching around $98 and $95 per barrel, respectively. For the full year 2023, they could reach levels of $105 and $100 per barrel, due to factors such as supply constraints and increasing global demand.
OPEC, meanwhile, issued an update that said oil demand would remain robust throughout the year amid the likelihood of a supply shortfall. How big will this gap be in your assessment?
OPEC’s production cuts, combined with Russia’s cooperation, are expected to result in a supply shortfall of around 3.3 million barrels per day (mbpd) in the near term, according to OPEC forecasts and of the IEA.
What will be the impact on India, which is a major importer of crude oil?
India, a net importer of crude oil, is sensitive to fluctuations in oil prices. When there is a significant rise in oil prices, it often leads to an increase in India’s current account deficit (CAD) due to rising import costs. This in turn puts pressure on the Indian rupee, which recently fell below 83.00 against the US dollar.
However, it is worth noting that despite these challenges, India has attracted foreign investments into its markets as its robust domestic performance and favorable business opportunities make India an ideal location for investments. This influx of investments has helped support the performance of the rupee against other currencies, particularly the US dollar. The overall impact on the Indian economy depends on the duration and magnitude of the increase in oil prices, as well as other factors such as government policies and global economic conditions.
We have seen a downward trend in inflation in 2023, but do you think the reduction in output by Russia and Saudi Arabia will disrupt the situation of global central banks?
Production cuts from Russia and Saudi Arabia could indeed pose challenges for global central banks. After the Russian-Ukrainian conflict, crude oil prices soared, forcing central banks to raise interest rates to combat rising inflation. However, inflation has since followed a downward trend due to falling crude oil prices.
If crude oil prices rise above $110 per barrel and stay there, it could potentially reignite inflation fears. However, the robust 2024 demand outlook projected by OPEC could help mitigate this risk, as OPEC and other producers will likely increase production after the end of 2023.
In this scenario, central banks will likely express concerns if the price of crude oil rises above and maintains a price above $105 per barrel. The delicate balance between managing inflation and supporting economic growth will pose a major challenge for central banks in the face of fluctuations in oil prices.Hedge funds and oil companies are buying dollars, fearing a further rise in the dollar index. Is it time to be bullish on crude oil from an investment/trading perspective?
Investors and traders should consider a cautiously bullish stance on crude oil. The recent 30% increase from the June low of $71.60 to the current level of $93 suggests upside momentum, but it may be limited, potentially reaching levels around $106-110 over the next six months. coming months, offering an upside potential of 10 to 15%. However, it is essential to be aware of the higher risk of a decline towards $80-85. A moderate approach to investing or trading is advised in this volatile market.
What strategy do you offer to traders and investors in the short, medium and long term?
For traders and investors, a moderate approach is advised at the current levels of $93 for Brent and $91 for WTI. Consider more aggressive positions on price declines near $85-88, as this provides a favorable risk-reward ratio. Maintain a bullish outlook as long as the $80 support level holds, with potential targets around $105.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
In the near term, Brent and WTI crude oil prices could rise by around 4-5%, reaching around $98 and $95 per barrel, respectively. For the full year 2023, they could reach levels of $105 and $100 per barrel, due to factors such as supply constraints and increasing global demand.
OPEC, meanwhile, issued an update that said oil demand would remain robust throughout the year amid the likelihood of a supply shortfall. How big will this gap be in your assessment?
OPEC’s production cuts, combined with Russia’s cooperation, are expected to result in a supply shortfall of around 3.3 million barrels per day (mbpd) in the near term, according to OPEC forecasts and of the IEA.
What will be the impact on India, which is a major importer of crude oil?
India, a net importer of crude oil, is sensitive to fluctuations in oil prices. When there is a significant rise in oil prices, it often leads to an increase in India’s current account deficit (CAD) due to rising import costs. This in turn puts pressure on the Indian rupee, which recently fell below 83.00 against the US dollar.
However, it is worth noting that despite these challenges, India has attracted foreign investments into its markets as its robust domestic performance and favorable business opportunities make India an ideal location for investments. This influx of investments has helped support the performance of the rupee against other currencies, particularly the US dollar. The overall impact on the Indian economy depends on the duration and magnitude of the increase in oil prices, as well as other factors such as government policies and global economic conditions.
We have seen a downward trend in inflation in 2023, but do you think the reduction in output by Russia and Saudi Arabia will disrupt the situation of global central banks?
Production cuts from Russia and Saudi Arabia could indeed pose challenges for global central banks. After the Russian-Ukrainian conflict, crude oil prices soared, forcing central banks to raise interest rates to combat rising inflation. However, inflation has since followed a downward trend due to falling crude oil prices.
If crude oil prices rise above $110 per barrel and stay there, it could potentially reignite inflation fears. However, the robust 2024 demand outlook projected by OPEC could help mitigate this risk, as OPEC and other producers will likely increase production after the end of 2023.
In this scenario, central banks will likely express concerns if the price of crude oil rises above and maintains a price above $105 per barrel. The delicate balance between managing inflation and supporting economic growth will pose a major challenge for central banks in the face of fluctuations in oil prices.Hedge funds and oil companies are buying dollars, fearing a further rise in the dollar index. Is it time to be bullish on crude oil from an investment/trading perspective?
Investors and traders should consider a cautiously bullish stance on crude oil. The recent 30% increase from the June low of $71.60 to the current level of $93 suggests upside momentum, but it may be limited, potentially reaching levels around $106-110 over the next six months. coming months, offering an upside potential of 10 to 15%. However, it is essential to be aware of the higher risk of a decline towards $80-85. A moderate approach to investing or trading is advised in this volatile market.
What strategy do you offer to traders and investors in the short, medium and long term?
For traders and investors, a moderate approach is advised at the current levels of $93 for Brent and $91 for WTI. Consider more aggressive positions on price declines near $85-88, as this provides a favorable risk-reward ratio. Maintain a bullish outlook as long as the $80 support level holds, with potential targets around $105.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
