Crude Oil May Plunge to $50 by June, SBI Research Predicts

COMMODITIES

Overview

SBI Research forecasts a significant drop in crude oil prices, potentially reaching $50 per barrel by June. This analysis, based on US Energy Information Administration estimates and India's oil basket correlation, suggests a faster deceleration than previously anticipated. A decline in oil prices could provide a substantial boost to India's inflation control efforts and economic growth, easing the burden of import costs.

Crude Oil Outlook Worsens

Crude oil prices are poised for a significant decline, with forecasts suggesting they could hit $50 per barrel by June. A new analysis by SBI Research indicates a steeper fall than previously expected, which could positively influence inflation and economic growth trajectories for importing nations like India.

Inventory Buildup Drives Forecasts

The U.S. Energy Information Administration (EIA) projects Brent crude oil prices to average $55 per barrel in the first quarter of 2026. This outlook is primarily attributed to an anticipated buildup of global oil inventories. The report highlights that India's crude oil basket typically moves in close tandem with Brent crude, showing a correlation of 0.98.

Technical Indicators Signal Lower Prices

Further reinforcing the bearish sentiment, technical analysis of Indian crude oil prices reveals a pattern where current prices are trading below their 50-day and 200-day moving averages. This suggests an ongoing downward trend from the current level of $62.20 per barrel, pointing towards potential lower price points in the near future.

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