Mumbai, Nov 4 (IANS): Brent crude is projected to continue trading in a broad range of $75-80 per barrel and any spike in oil prices may happen only if the Middle-East conflict escalates and some damage is caused to oil fields in Iran, according to a report on Monday.

Brent is currently trading at $74 per barrel and the market traded most of the time in the lower part of the range.

“What instilled in the markets a certain amount of anxiety is the development around the Middle-East conflict. Given the current set up brent crude will continue to trade in the same price band of $75-80 per barrel,” according to the report by Emkay Wealth Management Ltd.

Crude prices are weak as fundamental factors do not support higher oil prices and there has not been any major attacks on the oilfields in Iran.

What could disrupt oil supply and, therefore, adversely affect oil prices is any disruption of the traffic due to attacks by terrorists, and any potential damage to Iranian oil fields.

“It is worth mentioning here that the US sanctions on Iran as far as petroleum products are concerned is still in place and it has been tightened. But, beyond these regional issues which are of immediate concern, the fundamental factors do not support higher oil prices,” said the report.

The estimates by OPEC, International Energy Agency (IEA), and the US EIA present a picture of oversupply of oil in the coming year.

These estimates differ in the magnitude of oversupply but have a common ground in supply which is in excess of the demand growth.

Yet another factor is the fact that the demand from China for oil is weak. It has been more pronounce din the last three months.

This is reported to be due to weak demand in the local market mainly for diesel and gasoline. Chinese refining of oil has also come down in the last three months.

According to the report, this may be a prelude to a significant fall in the share of Chinese demand in the global oil demand growth.