New Delhi, Aug 8 (IANS) Crude oil prices are likely to remain volatile next week as markets track developments around the Strait of Hormuz, while the Indian rupee could gain further ground against the US dollar if geopolitical risks remain contained, commodity market experts said on Saturday.
Brent crude futures rose 1.29 per cent to $83.55 a barrel on Friday but remained below the previous week’s close of $90.12.
While US West Texas Intermediate (WTI) crude for September delivery settled at $78.18 a barrel, down from $84.67 at the end of the previous week.
The energy market witnessed sharp swings during the week as investors responded to changing expectations over a possible agreement to reopen shipping through the Strait of Hormuz which is a key global oil transit route.
WTI crude fell sharply at the beginning of the week after US President Donald Trump paused a planned strike on Iran in favour of pursuing a diplomatic agreement. Prices subsequently recovered as markets weighed reports of progress towards a temporary shipping arrangement.
Experts said a confirmed agreement to reopen the Strait could put further downward pressure on crude prices, while renewed tensions could quickly restore a geopolitical risk premium.
On the domestic market, MCX crude oil fell to around Rs 7,100 before recovering to close near Rs 7,400.
The commodity experts see immediate resistance at Rs 7,500-7,550, while Rs 7,380-7,300 is expected to provide near-term support.
A break below the support zone could push MCX crude towards Rs 7,250, with a stronger base seen around Rs 7,100-7,000, they said.
Meanwhile, the Indian rupee strengthened during the week with the USD/INR pair settling around Rs 95.2 after touching a low of about Rs 94.9.
According to analysts, the rupee remains technically supported as USD/INR trades below its long-term ascending trendline. A sustained break below Rs 94.9 could strengthen the rupee towards Rs 94.7-94.5.
On the upside, Rs 95.2-95.4 is seen as an immediate resistance zone for USD/INR. A move above this range could take the pair towards Rs 95.5-95.7, indicating renewed weakness in the rupee.
Technical indicators also favour the rupee, with the relative strength index (RSI) easing from overbought levels and the moving average convergence divergence (MACD) indicating slowing bullish momentum in USD/INR.
However, the outlook remains dependent on movements in the US dollar, crude oil prices, foreign portfolio flows and geopolitical developments, experts said.
–IANS
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