Crude oil prices are down 10% in 10 days, here’s how low they can go

Crude oil is down nearly 10% in just 10 days. Here’s a look at the key factors at play in the oil market and where experts see a near-term bottom.

Crude oil prices have cooled by nearly 10% in the past 10 days – a boost for India, which meets the lion’s share of its oil needs through exports. Lower oil rates are also supporting the national currency against the US dollar – which has hovered around 20 years against six other peers in recent months as importers buy fewer dollars to finance the same amount.

The latest episode of oil price cooling comes amid fears of at least a mild global recession – starting with the world’s largest economy, a relative easing of geopolitical tensions in Europe and worries about the re-emergence of related lockdowns to the pandemic in China. The United States, China and India are the biggest consumers of crude oil in the world.

Analysts fear that more sharp interest rate hikes to combat searing inflation could send major economies into a state of overheating, prompting a global demand blog.

Where is the oil going?

“While decoding the contrasting forces at play, we see strong oil price support at $80 a barrel, but Brent Crude looks poised to enter bearish ground if it slips below $80 a barrel compelling… In this case, we estimate oil prices to fall towards $65-$60 a barrel in the coming months,” said Sugandha Sachdeva, vice president of commodities and currency research at Religare Broking. CNBCTV18.com.

She sees Brent finding resistance around $100 a barrel.

“Markets are pricing in the Fed’s terminal rate peak of 5% in 2023, significantly higher than the 4.6% indicated by the September dot chart, which could further weigh on the global economy,” he said. she stated.

Here are three main factors at play in the oil market:

  • Demand concerns due to rising COVID cases in China
  • Dollar rally following hawkish comments from Fed officials
  • Support from lower levels due to OPEC-led production cut
  • Ravindra Rao, vice president of commodities research at Kotak Securities, expects WTI crude to trade in the range of $81.5-$85 per barrel in the near term.

    He sees support for the contract at $81.5-81/bbl, which he believes if compromised could lead to a key hurdle at $85/bbl.

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