The crude oil prices are trading at three-year highs and it would be the fifth straight week of gains for the commodity. Till date, the prices are up 51 percent and most brokerages believe there could be greater highs and in the third quarter, the prices could be nearly $80-85 per barrel.

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Throwing more light on the outlook for crude prices going forward, Sushant Gupta of Wood Mackenzie said all the signals for market fundamentals are pointing towards higher prices.

"We are seeing an economic recovery and a demand recovery in economies like US, Europe, and China. Vaccinations of COVID-19 are accelerating and infections in India are also at three-month lows," said Gupta, adding that the global crude inventories are coming down and will reach pre-pandemic levels by the year-end. At the same time, OPEC-plus is holding back production.

“So, expect crude prices to range between $75 and $76 per barrel for the next two months and average around $69 per barrel for this year and $67 per barrel for next year,” said Gupta.

However, one must not forget the downside risk for crude price in terms of Iran supplies and OPEC+ production levels. The OPEC+ is still holding back output at 5.8 million barrels for the market but they could start increasing their production, Gupta told CNBC-TV18.

According to him, when the base prices and taxes in consuming economies rise, fuel retail prices would rise as well.

For full interview, watch the accompanying video.

(Edited by : Bivekananda)

First Published:Jun 25, 2021 5:14 PM IST