New Delhi: Global crude oil prices are approaching the USD 120 per barrel mark as escalating tensions in West Asia and the upcoming US Federal Reserve policy decision keep energy markets on edge. Analysts expect another volatile week amid growing concerns over supply disruptions.
Brent Crude Crosses USD 117
Brent crude futures for December delivery surged USD 7.52, or nearly 7 per cent, last week to settle at USD 117.38 per barrel.
West Texas Intermediate (WTI) futures gained USD 4.25, or 4.3 per cent, to close at USD 103.27 per barrel.
In India, November crude oil futures on the Multi Commodity Exchange (MCX) climbed Rs 406, or 4.32 per cent, to Rs 9,800 per barrel during the holiday-shortened week.
West Asia Tensions Raise Supply Fears
Escalating US-Iran tensions, Houthi attacks on Saudi infrastructure and threats to shipping through the Strait of Hormuz have increased supply concerns.
Ajit Mishra, SVP - Research at Religare Broking, said crude prices could touch USD 120 if disruptions affect energy infrastructure or shipping routes.
However, any meaningful progress towards easing geopolitical tensions could trigger a sharp correction.
Fed Decision And Inventory Data In Focus
Investors will closely monitor the US Federal Reserve's October 27-28 policy meeting, alongside weekly crude inventory reports from the American Petroleum Institute and US Energy Information Administration.
Analysts believe a hawkish Fed stance could strengthen the US dollar and pressure crude prices.
However, continuing supply disruptions could limit any decline.
Supply Measures Fail To Cool Prices
Navneet Damani, Head of Research - Commodities at Motilal Oswal Financial Services, said security threats and elevated freight costs continue to affect oil shipments.
Despite proposed strategic reserve releases by the International Energy Agency and G7, markets remain concerned about actual supply availability.
What Rising Crude Means For India
Sustained elevated crude prices could increase India's import bill, weaken the rupee and add inflationary pressure.
Higher energy costs may also squeeze corporate profit margins and widen the current account deficit.
Analysts expect geopolitical developments, Fed commentary and inventory figures to determine crude's next major move.
