Crude oil prices expected to decline to USD 50 per barrel by June 2026: SBI report

The report highlighted that the overall outlook for crude oil prices in 2026 is weakening further from current levels amid rising inventories and softer global trends.

It stated "Crude oil prices to soften significantly in 2026 (to touch USD 50 /bbl by June 2026".

The report noted that the U.S. Energy Information Administration has estimated that Brent crude oil prices could fall to an average of USD 55 per barrel in the first quarter of 2026. This decline is largely attributed to a buildup of inventories, which is expected to exert downward pressure on prices.

Given the strong linkage between global and domestic crude prices, the report stated that the Indian crude basket, which has a correlation of 0.98 with Brent crude, is also expected to follow a similar softening trend.

As a result, movements in Brent crude prices suggest further easing in the Indian basket in the coming months.

The report also mentioned that a moving average analysis of Indian crude prices indicates that current levels are trending below both the 50-period and 200-period moving averages. This technical trend points to the possibility of lower prices ahead from the current level of USD 62.20 per barrel.

The expected decline in crude prices is also likely to have a favourable impact on India's inflation dynamics.

The report stated that the anticipated fall in the Indian basket price to USD 53.31 per barrel, combined with the dynamic daily pricing mechanism, would be transmitted to fuel prices at retail fuel stations.

The report estimated that a 14 per cent correction in the Indian basket in the fourth quarter of FY26 could exert a downward pressure of around 22 basis points on the CPI basket, assuming a 48 per cent passthrough.

This moderation is expected to pull average CPI inflation for FY27 decisively below 3.4 per cent, providing meaningful relief on the inflation front also. (ANI)