Crude oil price news: Crude oil price likely to trade between $98-114.50 range next week

Volatility has become the hallmark in the global markets and this might persist until the war between Russia and Ukraine subsides.

Last week, crude oil lost nearly 5 per cent on demand concerns and extended additional 5 per cent losses on Monday. WTI crude oil made low of almost $96.35 and on

price fell to Rs 7,335 amid worries that prolonged COVID-19 lockdown in Shanghai and US rate hikes would dent global economic growth.

US dollar index at a two-year high further pressured crude oil prices.

However, from Tuesday we saw a V-shape recovery in crude oil prices wherein they not only covered all losses but rose 10 per cent in the last 4 days.

WTI crude futures were hovering around $105 per barrel on Friday and were up 5 per cent in April as the US oil benchmark headed for its fifth straight monthly gain after another volatile period marked by geopolitically supply disruptions and Covid-induced demand slowdown in China.

The Russia-Ukraine war has entered into a third month despite diplomatic efforts for a ceasefire, with the EU inching towards joining the US and UK in imposing a ban on Russian crude imports, giving a push to oil prices.

Russia has also recently halted gas supplies to Bulgaria and Poland after the EU-member countries refused to pay gas imports in Rubles, escalating the energy crisis in Europe.

China Scare

Meanwhile, China’s virus outbreak has added another source of volatility to the market and marred the demand outlook.

The nation has extended mass testing to more cities, with lockdowns leading to swelling oil stockpiles and hitting demand significantly from the world’s biggest crude importer.


This week global currencies also played an important role in the movement of crude oil prices. The Japanese yen hit a 20-year low against the US dollar as the Bank of Japan has reinforced its commitment to low-interest rates despite rising inflation.

Meanwhile, the Euro currency fell to a five-year low against the dollar as soaring energy prices crimp the Eurozone economy.

The crude oil price rallied strongly after breaching the $101.65 level, to touch the first target at $104.60 and consolidate. We expect the crude oil price to surpass the current level and achieve $109.15 levels on a near-term basis.

However, disappointing US GDP data, strength in the dollar, and Chinese demand concerns could restrict further gains.

Market participants will keenly watch the US Fed meeting outcome and commentary which will come on May 4.

We are expecting a 50 bps hike which is discounted in the current levels but any changes higher or lower than the expectation, markets will react sharply on either side.

The expected trading range for crude oil next week would be between $98 support and $114.50 resistance.

The author is Vice-president, Commodities, Mehta Equities Ltd.

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