Quote on Crude Oil Prices by Mr. NS Ramaswamy, Head of Commodities & CRM, Ventura
Below the Quote on Crude Oil Prices by Mr. NS Ramaswamy, Head of Commodities & CRM, Ventura
The temporary calm returns in the transit routes and Crude oil prices are moderating as peak geopolitical risk premiums recede. With the shipping stability and easing of supply concerns, the acute "war risk premium" is shedding. Crude oil prices are currently undergoing a corrective phase, with Brent trading around $100–$104 per barrel and WTI hovering near $92–$97 per barrel. The market approach is now a shift from panic buying to a wait-and-watch approach. The price action is not due to any physical demand, but the reaction to headline flows of international diplomacy. Physical inventory levels remain structurally tight with massive global stock drawdowns.
Near-term driving factors: · Strait of Hormuz status and US-Iran diplomatic or military standoÝs. Optimism is surrounding on the talks at the UN General Assembly today. · Internal OPEC+ production adjustments and output policy decisions. Actual energy exports from Gulf producers have remained surprisingly robust. · Pacing of seaborne crude recovery and inventory replenishment. · Saudi Arabia suppliers recovery from disruptions signals a deflation of bullish case of spot market tightness. · Global interest rate hawkish stance continues to strengthen the US Dollar creating an inverse drag on dollar-denominated crude. · “Crack Spreads” (the margin between crude and refined products) has helped crude prices moderate but the refining crunch to diesel and gasoline prices is exceptionally high and demand for refined products is tight.
Oil is expected to remain range bound. Near-Term, Brent forecasts between $90 and $95 per barrel. WTI between $75 and $80, if geopolitical supply risks completely neutralize resulting in de-escalation. Medium Term supply is expected to outpace demand as global inventories start rebuilding giving an outlook of lower prices.
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