DS Investment & Securities: "Oil Prices Remain Stable... No Cause for Concern"

On June 19, DS Investment & Securities analyzed that the current level of international oil prices is not negatively impacting the market.

On June 18 (local time), July West Texas Intermediate (WTI) crude oil on the New York Mercantile Exchange (NYMEX) closed at $75.14 per barrel, up $0.30 (0.40%) from the previous trading day. Meanwhile, August Brent crude oil on the London ICE Futures Exchange was recorded at $76.70 per barrel, up $0.25 (0.33%). Recently, international oil prices have been on the rise due to instability in the Middle East.

Yang Haejung, a researcher at DS Investment & Securities, stated, "Looking at the pattern between oil prices and stock market declines, oil prices begin to have a negative impact on the market when they exceed $90 per barrel or rise by more than 50% compared to the previous year." She added, "Even though a war has broken out in the Middle East, oil prices remain stable at around $70 per barrel, so there is no need for concern at this point."

She emphasized, "The market remains strong despite unexpected variables such as war, primarily because there is ample liquidity." She continued, "Liquidity is accumulating to a level sufficient to offset risks."

She further explained, "If oil prices surge beyond the aforementioned thresholds this time as well, a correction may occur. However, I also expect a strong rebound afterward."

She assessed, "As the war in the Middle East has persisted for a long time, the market may have developed some resilience." She continued, "Nevertheless, since Iran is an oil-producing country, the upside risk for oil prices is clearly elevated." She added, "Oil price movements are always a variable that must be closely monitored."