Quote on recent Crude Oil Prices by Mr. NS Ramaswamy, Head of Commodities & CRM, Ventura
Below the Quote on recent Crude Oil Prices by Mr. NS Ramaswamy, Head of Commodities & CRM, Ventura
Brent crude oil crosses the $100 per barrel mark The intensified military actions involving the U.S, Iran and regional proxies have heightened the oil supply anxiety. The shipping choke points are threatening the global crude flows. It has reignited the physical damage to the gulf refining and production infrastructure. Geopolitical risk premium is back into the market with diminishing prospects for an immediate diplomatic resolution. Brent crude oil’s return of triple-digit price has triggered immediate warning signs across global financial systems. Besides Brent, the benchmark Crude WTI also rallied significantly trading at $95 a barrel. Vulnerable economies faces renewed threats of increasing import bills, widening current account deficit, currency stability and fiscal deficits with the global inflation raising worries on the global economic growth. These have complicated the Central Banks on the interest rate outlook. Stock market corrections follows the crude spikes. The sustained oil spikes rely heavily on political developments and any unexpected turn of events related to ceasefire agreements and reopening of the Strait of Hormuz could rapidly dissolve the geopolitical risk premium and a steep correction in Crude Oil prices. Hence the stock market too carries a high risk and volatility. Commodity complex Gold and Base Metals are concurrently rallying as a cross-asset inflation hedge.
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