The Reserve Bank of India anticipates a little slowdown over the medium term in light of worries regarding the recent spike in global petroleum prices. According to the RBI’s monthly bulletin, the two largest consumers of crude oil, China’s slowing development and the U.S. anticipated drop in fuel consumption, will keep crude prices at $86 per barrel at the start of the upcoming fiscal year 2024–2025. “Crude futures indicate that prices are expected to remain at U.S. $86 per barrel in April 2024 as weaker growth in China and the projected decline in U.S. retail fuel consumption are likely to subdue demand,” the paper stated.
WTI crude oil traded at $90.60/bbl on the New York Mercantile Exchange on Friday, while Brent crude’s price on the Intercontinental Exchange was $93.52/bbl. The International Monetary Fund revised its earlier projection for economic growth in China next year from 4.5% to 4.2% in its most recent outlook. In addition, it predicted that growth in the second-largest economy in the world will slow to 3.7% in 2027 from 4.6% in its assessment from the previous year.
Prices are anticipated to decline despite the non-OPEC members like Brazil and Guyana improving their supplies, according to RBI. However, the report noted that the conflict between Israel and Hamas had increased market uncertainty. Market is keeping a careful eye on the situation in Israel because it appears that the conflict is now moving closer to the Middle East with each passing day. According to researchers, the Middle East alone is responsible for one-third of global oil production, so if the violence spreads further, it might have an effect on the oil markets.
Additionally, according to statistics from the Energy Information Administration, oil stockpiles in the U.S. decreased by 4.5 million barrels to 419.7 million barrels in the week ending October 13. Oil prices may rise higher in light of the shrinking supplies and the worsening crisis in Israel. “Over the previous six months, global crude oil prices have been very volatile. The central bank warned in its bulletin that the price of crude may rise if geopolitical tensions increased and OPEC+ continued to limit production in the face of high demand.
