In a recent note, Goldman Sachs has increased its Brent crude oil price forecasts for the second half of 2024 and 2025. The bank anticipates that the elevated geopolitical risk premium currently affecting oil prices will moderate in the coming months.
The Indian rupee experienced a narrow range of fluctuation before marginally rising by 1 paisa against the US dollar on April 24th, settling at 83.30. The strengthening support from positive domestic equities was offset by the rising value of the American currency. Forex traders attributed this movement to elevated crude oil prices and substantial foreign fund outflows in the global market, which dampened investor sentiment. Additionally, geopolitical tensions in the Middle East added uncertainty to the market outlook.
Brent crude futures have witnessed a significant surge of 13.4% year-to-date, reaching $87.26 per barrel. This increase is primarily attributed to escalating tensions in the Middle East, production cuts by OPEC, attacks on energy infrastructure, and increased oil demand from major consuming nations. The market has experienced further volatility due to heightened tensions between Iran and Israel, with Brent futures soaring by 4% following an attack on April 19. Geopolitical uncertainties, particularly the potential closure of the Strait of Hormuz, could lead to a substantial increase in crude oil prices. Additionally, rising inflation and the challenges faced by central banks in guiding inflation towards target levels are exacerbating economic dynamics and adding pressure on policymakers.
After a brief dip, oil prices regained some ground on Tuesday, influenced by geopolitical developments in the Middle East. Both US West Texas Intermediate and Brent crude futures saw marginal increases as investors reassessed the supply risks associated with the region. Although hostilities between Israel and Iran had no immediate impact on oil supply, analysts cautioned that the evolving geopolitical landscape remained a key factor influencing prices.
Oil prices rebounded during early Asian trading on Tuesday despite declines in the previous session. Investors remain cautious amidst ongoing geopolitical tensions in the Middle East. U.S. West Texas Intermediate crude futures increased by 40 cents, while Brent crude oil futures rose by 39 cents.
