Crude oil prices could rise further as escalating tensions between Saudi Arabia and Yemen's Houthi rebels raise concerns about a wider regional conflict, Seth R. Freeman, Senior Managing Director at GlassRatner Advisory & Capital Group, told NDTV Profit. Freeman said Brent crude could climb to $115 per barrel, while a move to $120-$125 would represent a significant jump from current levels.
Crude Oil Prices Face Fresh Geopolitical Risks
Brent crude was trading near $107 per barrel, remaining elevated despite a ceasefire in the Russia-Ukraine energy conflict. Freeman said the Houthis' attacks on Saudi Arabia, including a strike on an airport, marked a significant escalation that could draw Riyadh more deeply into the conflict.
However, when asked whether oil prices could reach $120 to $125 per barrel in the near future, Freeman said further gains were possible, although such a sharp increase would be substantial.
“I can imagine it hitting 115,” he said.
Freeman also highlighted the pressure of high fuel costs in the US, citing gasoline prices of nearly $7 per gallon and diesel prices of $9 per gallon in Northern California. He said these levels were unsustainable and could force a policy response from the Trump administration. He also pointed to President Donald Trump's suggestion of importing Russian oil despite existing sanctions.
AI Valuations Face Questions As Earnings Season Begins
Freeman also discussed concerns surrounding artificial intelligence stocks, as US markets ended lower amid questions over whether elevated valuations adequately reflect future earnings growth.
He said investors were concerned about whether AI companies would deliver the earnings they have projected, noting that stock prices typically reflect expectations about future performance.
Freeman said substantial infrastructure and capital investment was continuing across the AI sector, with competition intensifying as companies develop specialised products for industries such as law, accounting, and automotive. He suggested that industry-specific applications could become a more meaningful source of earnings than broad AI offerings.
US Midterm Elections Could Shift Policy Direction
On the upcoming US midterm elections, Freeman said the outcome could make legislation more difficult to pass, depending on the balance of power in Congress. He cautioned against assuming a decisive Democratic victory, noting that overconfidence could discourage some voters from turning out.
Freeman expected several Trump administration policies to be rolled back if Democrats made significant gains, adding that US policy towards Russia and Ukraine could also change.
The discussions come as investors weigh geopolitical risks, elevated energy prices, and questions over AI-driven market valuations amid the start of the US corporate earnings season.
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