Crude oil on the boil again: What it means for the stock market and economy

Crude oil prices are soaring and an expected trade deal between the US and China is the immediate trigger. Tensions between US and Iran is the other factor. The Brent variety has surged by around $6 or 10% during December. The increase has been around 18% for the October-December quarter.

With crude oil getting costlier, there might be some short-term profit booking. However, experts say the global crude oil market will remain firm in the coming months as well. Opec’s decision to keep oil production low till March 2020 is the main reason for it. “The downside in oil market will be restricted due to supply cut by Opec and the US-China trade deal. So, Brent is expected to consolidate in the $63-68 range during the first half,” says Manoj Kumar Jain, Director, IndiaNivesh Commodities.