Crude oil prices declined nearly 2% in futures trade on Friday, driven by profit-booking after recent gains. The commodity had been trading at elevated levels due to ongoing geopolitical tensions and uncertainty over supply from the Gulf region.
Market Movements
On the Multi Commodity Exchange (MCX), crude oil for June delivery fell by Rs 76, or 1.9%, to Rs 3,925 per barrel, with a business volume of 1,123 lots. Similarly, the July contract declined by Rs 73, or 1.8%, to Rs 3,966 per barrel, with a business volume of 50 lots.
Analysts attributed the decline to profit-booking by traders after a recent rally. However, they noted that prices remain supported by geopolitical risks and supply concerns from the Middle East.
Global Factors
Globally, West Texas Intermediate (WTI) crude was trading 0.5% lower at $70.52 per barrel, while Brent crude fell 0.4% to $74.68 per barrel in New York. The ongoing tensions in the Gulf region and uncertainty over production levels from key exporters continue to influence market sentiment.
Market participants are closely watching developments in the Middle East, as any disruption in supply could lead to further price volatility. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies are expected to meet next month to discuss production targets.
Outlook
Analysts suggest that crude oil prices are likely to remain volatile in the near term, with a bias towards the upside due to supply constraints. However, any easing of geopolitical tensions or a stronger US dollar could weigh on prices.
Investors are advised to monitor global cues and trade with caution, as the market remains sensitive to news flows from the Gulf region.
