New Delhi: Crude futures rose 2 percent to a six-week high of Rs 8,554 per barrel on Thursday amid strong global trends as heightening tensions involving the US and Iran stoked fears of prolonged disruptions to oil exports from West Asia.
On the Multi Commodity Exchange (MCX), crude futures for August delivery increased by Rs 144, or 1.71 percent, to Rs 8,554 per barrel, marking the gains for the fifth straight session.
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The contract last traded around these levels on June 10, when it had touched at Rs 8,443 per barrel on the commodities bourse.
The September contract also advanced by Rs 92, or 1.13 percent, to Rs 8,231 per barrel on the MCX.
"Crude prices climbed in the domestic markets on Thursday, posting a six-week high as threats to global oil supplies intensified," said Aamir Makda, Commodity & Currency Analyst, Technical Research at Choice Broking.
In the international markets, Brent oil futures for the September delivery rose USD 2.77, or nearly 3 percent, to USD 96.84 per barrel, its highest level in about two months, on the Intercontinental Exchange (ICE).
Brent traded around these levels on May 22, when it had quoted at USD 96.64 per barrel.
The West Texas Intermediate (WTI) crude for the September contract also gained USD 1.78, or 2.05 percent, to hover near a two-month high of USD 88.61 per barrel on the New York Mercantile Exchange (NYMEX).
"Brent extended gains to hover near USD 96 per barrel on Thursday, while WTI was above USD 88," said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.
According to analysts, crude registered its fastest monthly price rise since the disruption of Gulf oil exports through the Strait of Hormuz earlier this year, with the conflict entering a more dangerous phase over the last 24 hours.
Banerjee said Yemen's Houthis have escalated from threatening a blockade of Saudi Arabia to attacking two of Riyadh's oil tankers in the Red Sea.
The strikes were significant as Saudi has increasingly relied on its Red Sea export route from Yanbu to bypass the Persian Gulf after disruptions in the region, he noted.
The US military on Wednesday carried out another round of airstrikes on Iran for the 12th consecutive night, even as diplomatic efforts continued to secure an interim deal.
Later, Iran retaliated by carrying out strikes on US-linked military installations in Jordan and Kuwait.
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Meanwhile, President Donald Trump also signalled that military operations would intensify, heightening fears of a prolonged conflict.
"If Houthi attacks intensify and lead to a partial or complete disruption of shipping through the Bab el-Mandeb Strait, then Brent crude could climb above USD 100 per barrel," Banerjee added.
Brent crude, which had touched USD 126 per barrel during the peak of the conflict in April before sliding to around USD 71 at the start of this month, has rebounded sharply to around USD 96 amid renewed geopolitical tensions.
Global investment bank Goldman Sachs has cautioned that Brent crude could rise to as high as USD 120 per barrel by the end of the year if exports through the Strait of Hormuz are not restored.
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