RESEARCH
Motilal Oswal sees crude oil prices trade in a range in short term
This story was originally published at 21:36 IST on 24 February 2025
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MUMBAI – Crude oil prices are expected to trade in a range in the short term, as prices are in a tug-of-war between China's economic strategies, geopolitical tensions, US President Donald Trump's energy policies, and the supply decisions of the Organization of the Petroleum Exporting Countries and allies, analysts at Motilal Oswal Financial Services said in a report.
Oil prices are seen trading in the range of INR 5,400-INR 6,800 per barrel on the Multi Commodity Exchange of India. The West Texas Intermediate crude on the New York Mercantile Exchange is seen in the range of $64-$80 per barrel in the short term, the report said. "Geopolitical events will heavily influence oil markets, but their exact impact remains uncertain," it said.
Trump's policies are bearish for crude oil prices as his administration is expected to boost oil and gas production in the US. Oil producers in the US are boosting efficiency and maintaining production levels despite lower prices, the report said. Moreover, Trump has imposed 25% tariff on imports from Canada and Mexico, which will come into effect from Mar. 4. These tariffs could have huge implications on both the countries. Imports from Canada and Mexico account for about 14% and 15% of the total US imports, respectively, but they reflect nearly 80% of exports from both the counties, it said.
Crude oil production from OPEC and allies is set to rise by 100,000 barrels per day this year, followed by a 600,000 barrels per day increase in 2026. Weak oil demand growth and strong non-OPEC supply could lead to an oversupply in the oil market, the report said. At 2110 IST, the most-active March crude oil contract on the domestic bourse was at INR 6,134 per barrel, down 0.2%. The most-active April crude oil contract on the NYMEX was up 0.1% at $70.48 per barrel. End
US$1 = INR 86.69
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Ashutosh Pati
Edited by Ashish Shirke
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