Crude Oil Outlook Turns Bearish For 2026
From a trader’s lens, the crude oil narrative for 2026 is clearly tilting bearish. According to a State Bank of India report, global crude oil prices are expected to soften significantly, with Brent crude projected to slide to around USD 50 per barrel by June 2026. The broader outlook suggests weakening price momentum amid rising inventories and easing global demand trends.
The report also cites estimates from the U.S. Energy Information Administration, which expects Brent crude to average USD 55 per barrel in Q1 2026, primarily due to inventory build-ups exerting sustained downward pressure on prices.
Indian Crude Basket Likely to Follow Global Trend
For traders tracking domestic cues, the linkage is almost mechanical. The Indian crude basket has a 0.98 correlation with Brent, meaning any global softness is quickly reflected locally. As Brent trends lower, Indian crude prices are expected to mirror this move in the coming months.
Technical indicators further strengthen the bearish setup. A moving average analysis shows Indian crude prices trading below both the 50-period and 200-period moving averages, signaling a potential continuation of downside from the current level of USD 62.20 per barrel.
Inflation Relief: A Key Macro Tailwind
From a macro-trading standpoint, falling crude prices could be a major positive for inflation trades. The report estimates the Indian crude basket could drop to USD 53.31 per barrel, and with India’s dynamic fuel pricing mechanism, this decline is likely to transmit to retail fuel prices.
A 14% correction in crude during Q4 FY26 could shave off nearly 22 basis points from the CPI, assuming a 48% passthrough. This moderation is expected to push average CPI inflation for FY27 below 3.4%, offering meaningful relief on the inflation front and potentially reshaping rate-cut expectations.
(This article has been syndicated from ANI, edited for clarity)
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