Crude Volatility, Rupee Strength Drive Markets
The global oil market remains volatile as traders track developments surrounding the Strait of Hormuz. The Strait is a key route for global oil transit, and any changes to its status can have significant effects on crude prices. Brent crude futures rose by 1.29% last week to $83.55 per barrel but remained below the previous week's close of $90.12.
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 experienced sharp price swings as investors responded to changing expectations about a possible agreement to reopen shipping through the Strait of Hormuz.
Experts warn that a confirmed agreement to reopen the Strait could put 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.
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. Analysts note that the rupee remains technically supported as USD/INR trades below its long-term ascending trendline.