According to a recent report by Emkay, a brokerage firm, they expect the immediate range for Brent oil prices to be between $83 and $92 per barrel. However, they also suggest that further observation is needed in the coming months to confirm this projection.
Emkay analyzed the current situation of Brent oil prices and noted that they have been staying within a certain range lately, sometimes getting affected by geopolitical tensions. They mentioned incidents like the Israel-Iran conflict causing temporary spikes, but overall stability returned once those situations resolved.
The report highlighted that despite challenges, oil supply has been consistent, keeping prices subdued. They anticipate occasional price increases due to factors like summer holidays but believe that long-term growth depends on the strength of the global economy and potential interest rate adjustments by the Federal Reserve.
Emkay stressed the importance of demand in maintaining higher prices. While positive factors can boost prices initially, sustained elevation relies on the intensity of demand growth.
Recently, oil prices have been falling, reaching their lowest levels in three months. Brent fell towards $81 a barrel, and West Texas Intermediate neared $77. This decline followed signals from the Federal Reserve hinting at possible ongoing higher interest rates, which could dampen energy demand.
The Federal Reserve suggested waiting a few more months to ensure inflation progresses towards its target before considering rate cuts. The possibility of higher borrowing costs, which could slow economic growth and impact oil demand, has contributed to the pressure on oil prices.
Investors have adjusted their expectations for global rate cuts this year due to more cautious signals from the Federal Reserve, alongside increased inflation figures in the UK and challenges faced by New Zealand’s central bank. This change in sentiment has led to a weakening of Asia stocks.
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