Will Oil Prices Crash Or Spike? Kunal Shah Explains The Big Picture

Added: 2026-05-22

[00:00:00]Kunal Shah, head commodities research, Nirmal Bang, is joining us right now on the show. Thank you so much, Mr. Shah, for taking time out and joining us in a very good afternoon. It is looking like a decent afternoon when you talk about the commodities complex as well. There's a little bit of a rebound that you're looking at when you talk about oil prices.

[00:00:16]And gold seems to be holding its ground right now. Firstly, how are you looking at the oil prices at some of those elevated levels?

[00:00:27]I think what with whatever is going on right now from last 8 to 10 days, what I'm able to make of is that we are at that point right now where it seems that US wants to make a deal with Iran as soon as possible because two months down the line there is a midterm election and if this continues, if oil goes to 120, 140, I think what just imagine what's going to happen.

[00:00:54]So, I think right now the likelihood of uh US making deal with Iran is very high and they may give some concessions to Iran or may have some loose ends in the deal where it is more beneficial for Iran.

[00:01:11]But the deal is very much there. It is going to take place. So, maybe 6 7 days, I think it should take place and that would lead to fall or correction short-term blip in the oil oil prices.

[00:01:26]WTI can go down to $90, Brent can go down to $95 per barrel. So, I'm not very optimistic about the oil prices outlook right now and I am of the view that the deal should be there by 6 to 7 days. Now, absolutely and Mr. Shah, since you said that you're not optimistic about the outlook going forward for oil prices, I also wanted to get a sense of what you think about the damage to some of the supply infrastructure because that has been a key talking point aside from the Hormuz disruption as well. Do you think that the supply concerns seem to have dissipated? Is Is that the sense that you're looking at when you talk about oil prices?

[00:02:06]I think the supply concerns will continue to be there even if there is a peace deal or the Hormuz passage if Iran and US both opens up. So, it's going to take a lot of time for these lost supplies to come back to the market, maybe 3 to 6 months down the line.

[00:02:23]We will see at least 50 to 60% of the supply, but sentimentally if there is no damage or if there is a good passage where the ships can freely enter and leave. I think that would that is something world wants to see rather than anything because after we've seen ceasefire, we haven't seen any major escalation from the both sides. So, I think it's just a matter of time where some deal which is agreed by Iran and US both that to be signed on and I think that is going to take place and that's the reason why oil prices have been under pressure from last 2 days and it's going to remain under pressure going forward in next week also.

[00:03:05]No, absolutely and you know, that makes perfect sense in terms of how you should be looking at prices as well and I also wanted to try to understand what you think about gold as well because it's been remaining in some of those range bound levels that we've been looking at.

[00:03:18]It's a narrow trading range no doubt, but do you think that the fundamental setup seems to be good?

[00:03:24]See, at this point couple of things which are not good for gold is slack Indian demand. India's wedding demand have remained weak.

[00:03:33]India's invested demand has gone down and after our Prime Minister have recommended and made an appeal to the Indian nations in India India Indian nationals that you should not be buying gold for 1 year. We are seeing a sentimental impact. There has been a constant sell-off of gold ETF. we are seeing constant pullback everywhere. So, I am of the view that we are not going to see any you know, sharp increase in demand and that can lead to some fall in near term for $4,400 a kind of levels where gold should settle and going forward during the end of the year, we can see gold settling at 4,800.

[00:04:18]No, absolutely. You know, and that makes sense in terms of those levels as well.

[00:04:21]But if somebody is waiting by for fresh buys or So, somebody if if they want to buy gold, they should wait a bit and rather than jumping it and buying right now, wait for the correction. Gold is already expensive by 8 to 10% because of the hike in duty from 6% to 15%.

[00:04:41]So, if there is a fall of gold in international market by 100 to 150, that would be a great opportunity again to enter long position for the 8 to 10% CAGR return for next 2 years.