Crude Oil Price: The decline in crude oil prices in the international market continued on Monday. After posting its biggest weekly drop since April 2020, crude oil once again slipped below $100 per barrel today. The softening of the market comes at a time when traders are hoping for a diplomatic solution to the US-Iran standoff amid ongoing attacks in West Asia.
On Monday, November 9, Brent crude futures fell 1.04 percent to $97.30 a barrel. A drop of more than 1 dollar was seen at one point during the trading. At the same time, American West Texas Intermediate (WTI) crude also fell 58 cents, or 0.60 percent, to $90.29 a barrel.
The market has got relief after Trump’s statement
Donald Trump’s big statement is behind this recent drop in oil prices. In a phone interview with CNN, Trump indicated that he would not authorize new strikes on Iran if talks to end the conflict move forward. Trump has made it clear that if the two sides reach a strong agreement, it is highly unlikely that further military action will be needed.
Trump had previously hinted that major US attacks on Iran could resume after the US midterm elections last week. However, there are no signs of any major military action yet. On the other hand, the major victory of the Democratic Party in the US mid-term elections has also strengthened the hope among businessmen that the conflict will not escalate. This confidence has played an important role in driving down oil prices.
Attack on Aramco office in Riyadh
Despite diplomatic efforts, tensions remain high in West Asia. Iran has already warned that it will retaliate by targeting American and Israeli interests. Meanwhile, Yemen’s Iran-backed Houthi rebels attacked Saudi Arabia’s capital Riyadh on Sunday.
The offices of the state oil company Saudi Aramco have been damaged in this attack. According to the Saudi Press Agency, the city of Riyadh intercepted a new barrage of cruise missiles with ballistic missiles in the air. Aramco’s offices suffered minor damage in the attack. The relief is that there is no news of any casualties.
Oil may rise to $140 in 2027
On the one hand, while prices are falling, investment bank Goldman Sachs has raised its forecast for crude oil prices, citing rising risks to global supply. The bank raised its Brent crude forecast for December to $105 a barrel from $90 earlier. Also, the US WTI crude estimate has also been raised to $94 per barrel from $81.
According to a Reuters report, Goldman Sachs has warned that Brent crude could reach $140 a barrel in 2027 if oil production in the Gulf region remains 3.5 million barrels per day below the 2025 average. It may average around $130 throughout the year. The bank believes the geopolitical risk premium in oil prices will remain high due to fears of supply disruptions from the Middle East and difficulties in reaching a permanent deal.
Even after seven months, the strategy to end the war is not clear
On the other hand, analysts at JP Morgan have also expressed concern over the uncertainty surrounding the conflict. He says that it is still difficult to predict what turn this war will take next. At the beginning of the conflict, the bank hoped that the US administration would refrain from exceeding certain economic limits. But seven months into the war, many such economic constraints have been broken, while no clear strategy to end the war has yet emerged.
