- Crude oil futures declined, easing US-Iran supply concerns.
- Unexpected US crude inventory build also pressured global prices.
- Market volatility is expected from geopolitics and demand data.
Crude oil futures declined by more than 1 per cent on Thursday after US President Donald Trump indicated that he does not expect tensions between the United States and Iran to escalate into a full-scale conflict, easing concerns over potential disruptions to global energy supplies.
The decline followed a recent rally in oil prices, with traders booking profits as geopolitical worries showed signs of easing. However, analysts cautioned that volatility is likely to persist as developments in West Asia continue to influence market sentiment.
MCX Crude Oil Futures End Lower
On the Multi Commodity Exchange (MCX), crude oil contracts for July delivery fell by Rs 110, or 1.56 per cent, to Rs 6,963 per barrel, with a business turnover of 19,121 lots.
The August contract also declined by Rs 108, or 1.53 per cent, to Rs 6,970 per barrel. The contract recorded a turnover of 3,860 lots, reported PTI.
According to traders, weakness in global crude benchmarks prompted investors to book profits after the sharp gains witnessed in recent sessions.
ALSO READ: Buying Your First Home? Avoid These 5 Costly Home Loan Mistakes
Trump’s Comments Ease Supply Concerns
Speaking at the NATO Summit in Ankara, Turkiye, President Donald Trump said he did not believe Washington and Tehran were heading towards another full-scale war.
“I don’t think it’s going to start again,” Trump said, adding that he expects oil prices to soften as tankers continue to move through the Strait of Hormuz.
Despite those remarks, uncertainty remains. Iran has warned that it could shut the Strait of Hormuz and respond with what it described as overwhelming force if fresh attacks were launched.
The strategic waterway remains one of the world’s most important energy shipping routes, making any threat to its operations a key driver of crude oil prices.
Global Oil Benchmarks Also Trade Lower
The softer sentiment was reflected in international markets as well.
Brent crude for September delivery slipped to $77.62 per barrel on the ICE exchange, while West Texas Intermediate (WTI) crude for August delivery traded lower at $73.14 per barrel on the New York Mercantile Exchange (NYMEX).
US Inventory Data Caps Earlier Rally
According to Deveya Gaglani, Senior Research Analyst – Commodities at Axis Direct, crude oil had rallied earlier after Trump described the truce between Washington and Tehran as fragile following renewed attacks across the Persian Gulf.
However, the rally lost momentum after the US Energy Information Administration (EIA) reported an unexpected build in crude inventories.
The agency reported a 3 million-barrel increase in US crude oil stockpiles, compared with market expectations of a 2.4 million-barrel draw, tempering bullish sentiment.
Volatility Likely To Continue
Market participants expect crude oil prices to remain highly volatile in the near term as investors closely monitor geopolitical developments in West Asia, particularly around the Strait of Hormuz.
Analysts also expect US inventory data and broader signals on global oil demand to remain key factors influencing price movements in the coming weeks.
