Crude Oil Prices: Double-Edged Sword for Indian Marketers
The global crude oil market, a volatile beast, dictates the energy landscape for nations worldwide.1 For India, a nation heavily reliant on oil imports, the fluctuations in crude oil prices carry significant implications.2 While a dip in crude oil prices might seem like a welcome relief, especially for consumers, it presents a complex and often challenging scenario for oil marketing companies (OMCs) operating within the Indian market. This seemingly beneficial drop in prices acts as a double-edged sword, bringing with it a unique set of complexities that stem from market dynamics, government policies, and the intrinsic characteristics of the oil and gas sector.3
The initial and seemingly positive impact of lower crude oil prices is the potential for reduced import costs.4 For a country like India, where a substantial portion of its energy needs are met through imports, this can lead to a decrease in the overall expenditure on crude oil. This reduction can, in turn, alleviate pressure on the nation's current account deficit and theoretically translate to lower fuel prices for consumers. However, this potential benefit is often overshadowed by the ever-present threat of government intervention through excise duty hikes.
Governments, seeking to bolster their revenue, often capitalize on falling crude oil prices by increasing excise duties on petrol and diesel.5 This strategic move allows them to capture a significant portion of the savings that would otherwise be passed on to consumers. For OMCs, this translates to a reduction in the potential for increased margins. While they still benefit from reduced raw material expenses, the extent of the gain is substantially diminished. This delicate dance between market forces and government policies creates a complex environment for OMCs to navigate.
Furthermore, the expectation of price cuts for end consumers becomes a significant challenge for OMCs. Consumers naturally anticipate a corresponding reduction in fuel prices when crude oil prices decline. However, OMCs must carefully balance this expectation with the need to maintain their financial health. Rapid and substantial price cuts can strain their profitability, especially when coupled with excise duty adjustments. This balancing act requires a delicate approach, as OMCs must ensure their financial stability while remaining responsive to consumer demands.
Beyond the immediate impact on OMCs, lower crude oil prices pose a significant challenge to the upstream oil and gas sector. Upstream companies, involved in exploration and production, are directly affected by the decline in realized prices for their crude oil. This can lead to reduced profitability, delayed or cancelled investment projects, and even financial distress for some companies. The economic viability of many oil and gas fields is contingent on a certain price threshold. When prices fall below this level, production becomes less attractive, potentially hindering future energy security.
The impact on the gas sector is particularly noteworthy. Natural gas economics are often intertwined with crude oil prices, with gas prices sometimes linked to oil price benchmarks.6 A decline in crude oil prices can thus indirectly affect gas prices, making gas production and distribution less profitable. This can have broader implications for the energy sector, as natural gas is increasingly seen as a cleaner alternative to other fossil fuels.7 Reduced investment in gas infrastructure and production can hinder the transition towards a more sustainable energy mix.
Moreover, the volatility associated with fluctuating crude oil prices creates uncertainty for OMCs and the entire energy sector.8 Long-term planning and investment decisions become more difficult when the market is subject to rapid and unpredictable price swings. This uncertainty can deter investment in new projects and hinder the development of a stable and reliable energy supply. This volatility necessitates a robust and adaptable strategy for OMCs to navigate the unpredictable market.
From a macroeconomic perspective, while lower crude prices can potentially stimulate economic activity by reducing fuel costs for businesses and consumers, the potential for reduced government revenue due to lower oil prices (if excise duties are not increased) must be considered. In a country like India, where government revenue is crucial for funding infrastructure projects and social programs, a significant decline in oil-related revenue can have far-reaching consequences. This highlights the need for a balanced approach to fiscal policy, ensuring that government revenue remains stable while providing relief to consumers.
The challenges posed by lower crude oil prices highlight the need for a balanced and nuanced approach to energy policy. Governments must strike a delicate balance between providing relief to consumers, maintaining fiscal stability, and supporting the long-term health of the oil and gas sector. This requires careful consideration of excise duty adjustments, pricing mechanisms, and investment incentives. A coherent and forward-looking energy policy is essential to navigate the complexities of the global crude oil market and ensure the nation's energy security.
In conclusion, while lower crude oil prices may appear to be a boon, they present a complex set of challenges for OMCs and the broader Indian oil and gas sector. The potential for excise duty hikes, concerns about price cuts, and the impact on upstream realisations and gas economics create a double-edged sword scenario. Navigating this complex landscape requires careful policy decisions and a comprehensive understanding of the intricate dynamics of the global energy market. OMCs must remain adaptable and resilient, while governments must implement policies that balance consumer needs with fiscal stability and long-term energy security.
OILUSD trade ideas
CRUDE is looking weak. Price connection is expected#CRUDE #Analysis
Description
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+ Crude has formed a nice descending triangle pattern and price has broken down the support line which formed over the years.
+ A clear breakdown from this support would push down the prices further.
+ Next target is 50-40$ range.
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Treasury Secretary Bessent: Make Iran broke again Treasury Secretary Scott Bessent, speaking at the Economic Club of New York, said the U.S. is enforcing sanctions on Iran for “immediate maximum impact,” warning that Iranians should move their money out of the rial.
The goal is to cut Iran’s oil exports from 1.5 million barrels per day to near zero.
His comments came as oil prices fell to multiyear lows on Wednesday, driven by concerns that tariffs on Canada, Mexico, and China could slow economic growth and weaken crude demand.
Following Bessent’s remarks, both U.S. crude and Brent prices turned positive, with JP Morgan analysts noting that a decline in Iranian supply is currently the only bullish factor for oil prices.
Bessent also signaled that the administration is prepared to impose full-scale sanctions on Russian energy if it helps lead to a ceasefire in Ukraine. This is a welcome shift from the Trump administration, who so far has only been pressuring the victim of the war rather than the perpetrator.
SELL LIMIT USOILSeen consistent bearish structure on higher timeframes like the 4hr and 1hr confirming directional bias. Seen a smart money setup on the 15 min timeframe. Seen a sweep of liquidity then change of direction to the downside confirming structure. Currently waiting for price to reenter my mitigation zone at previous liquidity for the sell.
USOIL Bearish Momentum - Will It Reach 64.40?TVC:USOIL has broken below a key support zone, which has now flipped to resistance, aligning with a potential bearish continuation. The recent retest of this level held successfully, indicating strong seller interest and reinforcing the bearish outlook.
With momentum favoring the downside, the next logical target is 64.40, aligning with the prevailing bearish trend. As long as the price remains below the resistance zone, the bearish bias stays intact.
If you have anything to add or a different perspective, I’d love to hear from you in the comments!
USOIL Will Go Lower From Resistance! Sell!
Please, check our technical outlook for USOIL.
Time Frame: 1D
Current Trend: Bearish
Sentiment: Overbought (based on 7-period RSI)
Forecast: Bearish
The market is approaching a key horizontal level 6,657.4.
Considering the today's price action, probabilities will be high to see a movement to 6,198.3.
P.S
The term oversold refers to a condition where an asset has traded lower in price and has the potential for a price bounce.
Overbought refers to market scenarios where the instrument is traded considerably higher than its fair value. Overvaluation is caused by market sentiments when there is positive news.
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Oil support check.Three-month chart.
This is a situation on a very shaky edge.
The price has been crawling between the Kijun and Tenkan
lines for two years, the first of which works as resistance and the second as support.
A break of the ~$64.70 level could mean an exciting rally down to the ~$40 level first.
Speaking simply about the design of such an Ishimoku cloud, I would like to say.
we need to pay attention to the elongated cloud at the bottom. And now the price may
dive under it and fall into the $ 25-20 range for a while.
After that, it will start its recovery and it will again strive upwards to the level of $ 64.70.
So far, even Trump's statements have not broken the support.
But stand to drop the price out of the cloud, you will see a plunge to the depths.
Oil Prices Plummet as Trade Tensions RiseOil prices took a hit after Trump's tariffs were announced, and it's essential to understand the reasoning behind this drop.
When US imposed tariffs on Chinese goods, China retaliated by placing tariffs on US goods, including oil. This move led to a decrease in oil demand from China, which is the world's largest oil importer. As a result, oil prices plummeted.
◉ Key Factors Behind the Decline
● Trade Tensions: The escalation of trade tensions between the US and China led to a decrease in oil demand, causing prices to drop.
● China's Tariffs on US Oil: China's decision to impose tariffs on US oil imports reduced demand for US oil, contributing to the price decline.
● Global Economic Slowdown: The ongoing trade tensions and tariffs have led to a slowdown in global economic growth, further reducing oil demand and prices.
● Increased Oil Production: The US has been increasing its oil production, leading to a surplus in the market and contributing to the decline in oil prices.
◉ Technical Observations
● A notable decline in oil prices has been observed since mid-January 2025.
● Prices are currently hovering near the critical support zone around $66, a level that has historically provided a floor for prices.
● If this support level is breached, it may trigger a further decline in oil prices.
OIL Could Test 66, Bearish Trend Is IntactOIL Could Test 66, Bearish Trend Is Intact
Technical Analysis: The price may rise to test the broken structure zone near 68.70 before potentially moving downward again. The first support zone is anticipated at 67.10, with a lower support level at 66.00.
Oil prices declined for a third consecutive session as major producers' plans to increase output in April, along with concerns over U.S. tariffs on Canada, Mexico, and China, dampened investor sentiment and raised fears of slowed economic and fuel demand growth. - as reported by Reuters.
You may find more details in the chart!
Thank you and Good Luck!
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WTI Crude Oil (USOIL) BUY OPPORTUNITYTrade Setup
📉 Current Price: 66.40
🎯 Take Profit 1: 80.50
🎯 Take Profit 2: 87.29
🎯 Take Profit 3: 93.54
🛑 Stop Loss:
🔍 Why is this a high-probability setup?
✅ Historical RSI Reversals:
Since November 2021, crude oil has reversed from the RSI 30 oversold level 5 times—each time leading to significant bullish rallies. We are once again at this critical point, signaling a potential strong rebound.
✅ Accumulation Zone for Buyers:
Price has now entered a key accumulation area where buying pressure has consistently stepped in over the past 3 years. This zone has historically acted as a springboard for price rallies, making it an ideal location for long positions.
✅ Key Resistance Levels to Watch:
If momentum picks up, we can expect price to retest major resistance levels at $80.50, $87.29, and potentially $93.54, aligning with historical price action.
🎯 Strategy & Risk Management:
Entries in this zone have high reward potential with proper risk management.
Stop-loss placement should be based on your personal risk tolerance, ideally below the accumulation zone.
Keeping an eye on fundamental drivers like OPEC decisions, geopolitical tensions, and inventory reports will help in trade management.
🚀 Conclusion:
Crude oil is at a historically significant buy zone with strong technical confluence. If history repeats itself, we could see a powerful rally from these levels!
US OILUS OIL is making a falling triangle pattern on the weekly timeframe. The new administration in US is skeptical on high prices of oil, it is assumed that the US will want lower prices of oil in order to boost up economic activity amidst cease fire in the middle east region. Having all this is consideration and reviewing the pattern on the chart we can expect the oil prices to fall drastically once it breaks down the triangle. As the analysis is on weekly timeframe, it might take a few months to achieve the levels of 45 to 50. On the other hand if there is such a development that can shoot up the oil prices than this analysis should be considered null and void. As you all may know oil prices is one of the few commodities that is driven by news and events rather than pure charts analysis.
WTI CRUDE OIL: Major bullish signal on 1W.WTI Crude Oil turned oversold on its 1D technical outlook (RSI = 30.839, MACD = -1.280, ADX = 30.692) as it entered the 2 year S1 Zone. This is where all major rebounds took place. In the meanwhile a 1W RSI below 40.000 (like now) has been the strongest buy signal in the same period of time. Buy and target the LH Zone (TP = 76.00).
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WTI crude looks set to break $65 handleCrude oil prices have dropping another 4% with Brent reaching its lowest levels since December 2021, after breaking the September 2024 low of $68.60. If Brent is anything to go by, WTI looks like it too will break its corresponding September 2024 low of $64.95 - and therefore the $65.00 psychological level - soon.
Oil price prices have dropped on concerns about the economic impact of Trump's tariffs and after the OPEC+ decided to proceed with a planned April output increase.
Is WTI heading down to $60?
By Fawad Razaqzada, market analyst with FOREX.com
WTI Crude under pressure ahead of the weekly InventoriesBearish Scenario:
WTI Crude remains in a bearish trend, with price action aligned with the prevailing longer-term downtrend. The key resistance level to watch is 68.71. If an oversold rally occurs but faces rejection at this level, the downtrend is likely to continue, targeting 66.50, followed by 66.08 and 65.75 as the next downside support zones over a longer timeframe.
Bullish Scenario:
A confirmed breakout above 68.71 and a daily close above this level would invalidate the bearish outlook. This could trigger further upside movement, with resistance targets at 69.34, followed by the psychological 70.00 level.
Conclusion:
The broader outlook remains bearish, but 68.71 is the key pivot level. Rejection from this zone reinforces the downside bias, while a sustained breakout above it could shift momentum toward further gains. Traders should watch price action around this level to determine the next move.
This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Opinions, estimates and assumptions expressed herein are made as of the date of this communication and are subject to change without notice. This communication has been prepared based upon information, including market prices, data and other information, believed to be reliable; however, Trade Nation does not warrant its completeness or accuracy. All market prices and market data contained in or attached to this communication are indicative and subject to change without notice.