Brent crude may hover around the current level of $104 a barrel for the remaining part of the current year, but may fall to $98 per barrel next year, investment bank JPMorgan said on Friday. “Under scenarios where supply is constrained, we think oil could rally to $190/380 per barrel as well,” Sanjay Mookim, strategist and head of India equity research, JP Morgan, told FE.
International benchmark brent crude price fell below $100 a barrel on July 6 for the first time since April 25 on fears of a potential global recession. At 18:00 hrs (IST) on Friday, it was trading at around $105 per barrel. Brent reached to around $140 a barrel in early March following Russia’s aggression on Ukraine.
While an elevated price will cause a significant concern for India, Mookim said an oil price shock can further hurt global demand and drive more monetary tightening. “Elevated oil prices will be a significant concern for India. Current account balances are likely to remain negative exerting pressure on the currency. Higher inflation will be a drag on consumption and government spending.”
