Crude oil prices are expected to remain under pressure next week, with analysts pointing to ample supply and rising inventories as key factors. Geopolitical tensions between the US and Iran could introduce volatility, but the overall market sentiment leans toward a downward bias. Brent crude oil is projected to test the $90-92 per barrel range in overseas trade, according to Ajit Mishra, SVP of Research at Religare Broking.
The latest developments in the Middle East, including Iran's claim of launching drones targeting a US air-defence radar installation in Bahrain, have kept the Strait of Hormuz in focus. However, analysts suggest that the immediate shortage premium is gradually unwinding, shifting the market's focus from geopolitical risks to supply-demand fundamentals.
On the Multi Commodity Exchange, crude oil futures for November delivery fell Rs 185, or 2.16 per cent, over the past week to close at Rs 8,369 per barrel. The December contract declined Rs 196, or 2.31 per cent, to settle at Rs 8,282 per barrel. Overseas, Brent crude futures for January delivery slipped $2.48, or 2.52 per cent, during the week to close at $95.84 per barrel on the Intercontinental Exchange (ICE). West Texas Intermediate (WTI) fell $2.27, or 2.5 per cent, to finish at $88.56 per barrel on the New York Mercantile Exchange (NYMEX).
Mishra noted that Brent has slipped below $96 per barrel for a second consecutive weekly decline, driven by higher OPEC+ production and a larger-than-expected build-up in US inventories. OPEC-plus output rose by nearly 1.96 million barrels per day in October, while US crude inventories increased by 4.66 million barrels. For India, a sustained moderation in crude oil prices would be positive for inflation, the rupee, the current account, and corporate earnings.