International crude oil prices slipped on Wednesday after early gains, declining nearly 3 per cent from intraday highs as hopes of easing tensions between the United States and Iran weighed on market sentiment, reported news agency IANS.
Brent and WTI Retreat After Early Rally
Brent crude futures dropped to an intraday low of USD 102.79 per barrel, down about 2.9 per cent from the day’s high of USD 105.86. At the time of reporting, Brent was trading around USD 103.19 per barrel, nearly 1 per cent lower, reported IANS.
Similarly, US West Texas Intermediate (WTI) crude declined by as much as 2.19 per cent from its intraday high of USD 103.31, settling near USD 101.25 per barrel. The fall came after both benchmarks had posted strong gains earlier in the day, reported IANS.
Volatility Driven by Geopolitical Developments
Analysts attributed the sharp price swings to ongoing geopolitical developments and mixed macroeconomic signals. Market sentiment improved after US President Donald Trump indicated that the US could potentially step back from the conflict within two to three weeks, reported IANS.
Iran has also signalled a conditional willingness to ease hostilities, raising expectations of a possible de-escalation. However, analysts cautioned that uncertainty over the timing and structure of any agreement continues to keep markets volatile.
Strait of Hormuz Remains Critical Concern
Despite the decline, supply-side risks remain significant, particularly around the Strait of Hormuz, a key global oil transit route through which nearly one-fifth of the world’s crude supply passes, reported IANS.
Any disruption in this region could tighten supply and push prices higher again, limiting the downside in oil markets.
Prices Stay Elevated Above USD 100
Oil prices have largely stayed above the USD 100 per barrel mark throughout March, supported by geopolitical tensions and supply disruptions. Analysts noted that while easing tensions have triggered some profit-booking, the broader trend remains firm, reported IANS.
Global factors, including mixed economic data from major economies such as the US and China, along with currency movements, continue to influence crude price trends.
Indian Markets Gain on Positive Sentiment
The easing in crude prices boosted investor sentiment in domestic equity markets. Benchmark indices such as the BSE Sensex and Nifty 50 rose by up to 3 per cent in early trade, tracking positive global cues, reported IANS.
Uncertainty Continues to Loom
While hopes of de-escalation have led to a pullback in oil prices, analysts believe uncertainty remains high. Risks related to supply routes and geopolitical stability could continue to drive volatility in the coming days.
Markets are expected to remain sensitive to further developments in the US-Iran situation, with even minor updates likely to impact global oil prices significantly.
(With inputs from IANS)