New Delhi, February 4: Global crude oil prices may witness a mild uptick in the short term, but analysts predict they will hover around the $68-70 per barrel mark over the longer horizon. This outlook comes from a detailed report by MK Wealth Management Limited, the wealth management arm of MK Global Financial Services.
Market fundamentals paint a cautious picture. Slowing global growth has left consumers in major economies on edge, capping any potential price surges. Even with OPEC+ production cuts in place, Brent crude has stubbornly lingered between $60-65 for over a year. The persistent mismatch between rising supply and tepid demand has kept prices in check.
Demand forecasts lag far behind production increases, while prolonged low prices have squeezed capital spending in the energy sector. Major oil and gas firms are prioritizing liquidity and balance sheet health, deferring investments. Recent normalization of output from Venezuela and Iran—much of it flowing to Asian markets like China—has further flooded the market.
Yet, fresh geopolitical tensions cloud the supply outlook, introducing short-term volatility. Dr. Joseph Thomas, Research Head at MK Wealth Management, notes, “Geopolitical events may prop up prices briefly, but fundamentals suggest any rally will be muted.”
He urges energy companies to focus on capital discipline and operational efficiency. Citing the U.S. Energy Information Administration, the report forecasts growing global oil inventories through 2026, exerting downward pressure. Brent crude could average just $55 per barrel next year, underscoring ample supply.
This scenario offers relief to oil-importing nations like India, potentially easing inflation and supporting economic recovery. Investors should brace for a low-price environment, with opportunities in efficient operators.