Hawkish position: tightening global monetary policy to control oil prices

Fears of inflationary pressures led many central banks to tighten the money supply. The trend will lead to higher interest rates and, in theory, should dampen inflation.

In addition, prices have steadily declined due to increased supplies pumped in from the United States.

Currently, Brent crude oil prices have been hovering between $104 and $110 for the past few weeks, after peaking at $140 a barrel in early March.

Also, high prices are important for India as they determine the cost of gasoline and diesel in the domestic market.

India currently imports 85% of its crude oil needs.

So far, the high cost of crude oil has led state-owned oil marketing companies to raise the retail prices of petrol and diesel by Rs 10 in New Delhi.

These prices were revised for the very first time on March 22 after a gap of more than 4 months.

Crude oil prices are expected to remain relatively low due to rising inventories and the release of domestic inventories by the United States,” said Anuj Gupta, IIFL Securities vice president, Research.

“Although the Russian-Ukrainian issue may calm down, Brent could test possible levels of $98-$95.”

Kshitij Purohit, Head of Commodities and Currencies, CapitalVia Global Research, said: “Brent closed at $102.35 up around 1.76% last Friday. rate will have an impact on commodity prices next week.”

“A rate hike of 0.25 basis points is expected, which will absorb additional liquidity from the economy to control inflation globally. The near-term range is $97-$108.”

Dilip Parmar, Research Analyst, HDFC (NS:) Securities, said: “As long as the Crude Oil price is trading above $97, the outlook remains bullish while on the upside $110 could be capped. .”

“On the economic data front, the retail inflation number, ECB meeting and crude oil inventories to watch for the direction of crude oil prices.”

(Rohit Vaid can be contacted at rohit.v@ians.in)


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Felix J. Dixon