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    Expect crude prices in $70-$75/bbl band for next few months, says Vandana Hari of Vanda Insights

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    Expect crude prices in $70-$75/bbl band for next few months, says Vandana Hari of Vanda Insights

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    Vandana Hari of Vanda Insights is of the view that crude prices would remain in $70-$75/bbl band.

    Crude prices are down by around 3 percent overnight and are off from six-year highs. The crude market seems to be focused on too many things at the same time. Things like whether the UAE will step out of OPEC, will other countries follow, or is there time for the OEPC allies to reconvene a meeting again in July, and does August 1 see an agreement going through?
    Vandana Hari of Vanda Insights is of the view that the crude prices would remain volatile at least until some indication from OPEC, hopefully, of reconciliation between UAE and Saudi Arabia.
    "So, while the base case for the market on a consensus basis remains that OPEC+ will get its act together and they will negotiate some mid-point. However, there a range of possibilities. I don’t see many headlines coming from the OPEC front since yesterday. But the other factor which is playing on oil and will continue to play for the next few hours is resurgent fears over inflation and with Fed minutes coming out later, volatility is written all over the oil market," Hari said.
    "From the demand perspective, I don’t think anything has changed. The big question remains with regard to supply. I think the default for the time being unless OPEC proves otherwise remains that they will put progressively 2 million barrels per day into the market over August to December," Hari added.
    With regards to prices, she said until a few months ago the expectation was that Brent would stabilise around $60/bbl or even in low $70/bbl OPEC should be quite happy but there has been a shift in Saudi policy and in terms of how Saudi Arabia has given direction to OPEC+, it has become much more conservative with regards to easing supplies than one would have expected.
    “That makes me feel that in general Saudi Arabia supported by the majority within the OPEC+ group are looking to keep the market on the tighter side and not looking to take a chance with further slippage in prices, which means it would remain in $70-75/bbl band in coming months," she further said.
    For the entire interview, watch the video
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