International crude oil prices rose by up to 2% on Friday due to escalating tensions in the Middle East, even after the US announced a unilateral ceasefire. Brent crude, the global oil benchmark, increased about 2% to $107 per barrel, while US West Texas Intermediate (WTI) crude rose nearly 2% to $97.6 from the previous close.
In the domestic market, crude oil on the Multi Commodity Exchange (MCX) was trading at Rs 9,077, down 1% or nearly Rs 100. Brent crude has surged by 18.83% this week to trade around $107, while US WTI has seen a 17% gain during the week.
Experts mention that ongoing disruptions in the Strait of Hormuz are contributing to volatility, maintaining a cautiously bullish bias in the near term. They anticipate immediate resistance at $99 for global oil commodities, with a potential breakout extending gains towards $104.50 and even up to $110. Key support levels are identified at $95, while $90.80–$88.50 serves as a stronger base.
Despite the cautiously bullish outlook, experts emphasize that geopolitical developments could influence the overall bias. US President Donald Trump has stated that he would not resort to using a nuclear weapon in the conflict with Iran, opting for conventional methods. However, reports indicate an escalation in military actions in the region, including operations targeting Iranian small boats near the Strait of Hormuz.
Additionally, Israel and Lebanon have extended their ceasefire by three weeks, as tensions in the critical shipping route of the Strait of Hormuz persist. The region, responsible for about 20% of global oil trade, remains a focal point of concern due to military activities and disruptions.
On the equities front, domestic indices Sensex and Nifty traded up to 1% lower in early trade, influenced by selling pressure in IT and pharma stocks.
