No respite in New Year! Crude prices likely to hit $68 in 2018
Crude oil prices have been on a rise ever since the oil producing group Opec decided to extend output cuts.
Brent has surpassed 2015 levels and is trading around $64.75 per barrel level, while WTI is strongly holding $58 per barrel level in the international market. Crude prices are trading at around two and a half year high in global market( commodity tips ).
Production cut by Opec, Russia and other oil producing countries has helped rebalance the global oil inventory, and the move has been supporting the prices in the last six months. Current global demand-supply looks evenly balanced ( commodity tips ).
Positive global indicators from developed economies, especially from the US and European Union, is supporting the crude prices. Looking at the present demand and supply mechanics, we expect WTI would move towards the $60 mark by first week of January, while Brent is expected to touch $67-68 per barrel in the international market.
In the domestic market, the prices have remained stable due to appreciation in the rupee. Despite US Federal Reserves rate hike in December, the domestic currency appreciated after the BJP won state elections. We expect the rupee to trade in the range of Rs 63.60 to 64.20, which will not have great impact on crude prices in the domestic market. Any surge in the international crude price will also reflect in the domestic market( commodity tips ).
At the MCX, crude oil has strongly held on to the levels of Rs 3,680-3700 in the last two months. We expect prices will show more strength in the coming days, and could move in the higher price territory of Rs 3,940-4,000 per barrel.