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Informist, Tuesday, Sept. 2, 2025

 

By Ashutosh Pati

 

MUMBAI – Crude oil prices are expected to remain stuck in a broad range in September, as they have been for the past five months, but with a positive bias as market participants navigate through possible supply disruptions stemming from the Russia-Ukraine war, concerns about demand and a much-expected oversupply in the global oil market in the second half of the year.

 

As per the median of estimates from nine broking firms polled by Informist, the September crude oil contract on the Multi Commodity Exchange of India is seen at INR 5,400-INR 5,950 per barrel this month, translating into $61.23 a barrel at the current exchange rates. The October contract of West Texas Intermediate crude on the New York Mercantile Exchange is expected to trade between $61 and $69 a barrel this month.

 

The recent escalation in the Russia-Ukraine war after weeks of talks about a peace deal and the European Union's call for secondary sanctions on countries supporting Russia's military efforts in Ukraine has raised concerns about oil supply among traders. Moreover, the imposition of an additional 25% tariff on India by the US over the former's purchases of Russian crude oil also poses risks to supply. If India moves away from Russian oil and Russia is not able to find other buyers, it would put around 1.7 million barrels per day of supply at risk, analysts at ING had said.

 

However, this might not be enough to push prices out of the range seen in the past few months as analysts expect the oil market to be in a surplus in the second half of 2025.

 

"Washington's imposition of 50% tariffs on Indian imports over Russian crude purchases, alongside stepped-up drone and missile exchanges between Russia and Ukraine, keep a risk premium embedded in prices, though without further escalation, upside momentum is capped," Riya Singh, research analyst, commodities and currency at Emkay Global Financial Services said.

 

Anindya Banerjee, senior vice-president, commodity and currency, Kotak Securities, expects crude oil prices to be range-bound this month, with the Iran-Israel and Russia-Ukraine conflicts providing some support to prices.

 

At 1213 IST, the most active October crude oil contract on the NYMEX was 1.6% higher at $65.00 per barrel and the most active September contract on the MCX was at INR 5,734 per barrel, up 0.5% from the previous close. As long as crude oil prices stay above $62 per barrel, they are likely to trade in the range of $63-$68 per barrel, Deveya Gaglani, senior research analyst, commodities, at Axis Securities, said. If the US or the EU impose additional sanctions on Russia, prices could go up to $70 per barrel, Gaglani added.

 

A rapid increase in supply from the Organization of the Petroleum Exporting Countries and its allies this year has pushed the oil market into a supply glut for the remainder of this year, analysts said. The group is set to meet Sunday where market participants expect it to announce another hike in supply.

 

The eight member nations of the group--Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman--have aggressively increased production in the past few months, fully unwinding the 2.2 million barrels per day voluntary production cut the group had announced in late 2023. Media reports suggest the move was led by the de-facto leader of the group, Saudi Arabia, to punish nations which are producing more oil than their assigned quotas, such as Iraq and Kazakhstan.

 

Traders are now focused on the Sunday meeting of OPEC and allies, where the group is expected to deliberate on the possible restoration of 1.65 million barrels per day of production, a move that risks amplifying the supply glut projected by the International Energy Agency, which has flagged the potential for a record surplus in 2025, Singh said.

 

The International Energy Agency has raised its forecast for growth in global oil supply for 2025 and 2026, mainly because of the anticipated production increases by OPEC and its allies, while lowering its projections for the growth in demand. The Paris-based intergovernmental organisation now expects global oil supply to rise by 2.5 million barrels per day this year, higher than its previous forecast of 2.1 million barrels per day. In 2026, the agency expects global oil supply to increase by 1.9 million barrels per day compared with the rise of 1.3 million barrels per day it had projected last month.

 

Global oil demand is now expected to rise by 680,000 barrels per day this year, down 20,000 barrels per day from the agency's previous forecast of 700,000 barrels per day. In 2026, it expects global oil demand to increase by 700,000 barrels per day, also 20,000 barrels per day lower than its earlier forecast. The downward revision in global oil demand growth is because of tepid demand in major economies, and with consumer confidence still depressed, a sharp rebound "appears remote", the agency had said.

 

Additionally, with the summer driving season in the US ending on Monday's Labor Day Holiday, analysts do not expect any rebound in demand for crude oil. "Hedge funds have pared bullish bets on US crude to the lowest in almost 18 years, reflecting growing unease over both policy uncertainty and market fundamentals," Singh said.

 

"It is a wait-and-watch situation for crude," Sriram Iyer, senior research analyst at Reliance Securities, said. "Demand concerns will remain as US tariffs are in place, and demand from the summer driving season in the US has also ended," Iyer added.

 

Following are the details of estimates of brokerages on crude oil prices for September:

 

Brokerage	MCX support (in INR)	MCX resistance (in INR)	NYMEX WTI support ($)	NYMEX WTI resistance ($)
Axis Securities	5,400	6,000	62.0	69.0
Emkay Global Financial Services Ltd.	5,400	6,000	60.0	70.0
Kedia Advisory	5,240	6,150	60.0	68.0
Kotak Securities	5,400	5,850	61.0	67.0
LKP Securities	5,500	5,900	62.0	67.5
Nirmal Bang	5,400	5,950	58.0	72.0
Prithvi Finmart	5,440	5,910	60.0	70.0
Reliance Securities	5,300	5,900	61.5	67.0
Ventura Securities	5,400	6,200	62.0	72.0
Median	5,400	5,950	61.0	69.0

 

End

 

US$1 = INR 88.02

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

With inputs from J. Navya Sruthi

Edited by Deepshikha Bhardwaj

 

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