Crude oil futures slide over 1.5% as global benchmark prices extend losses

Mumbai: Crude oil futures declined sharply on Tuesday, tracking losses in international markets as easing supply concerns and subdued demand prompted traders to trim their positions.

On the Multi Commodity Exchange (MCX), crude oil contracts for August delivery fell by Rs 120, or 1.51 per cent, to Rs 7,837 per barrel. The contract recorded a business turnover of 4,507 lots during the session.

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According to market analysts, the decline was driven by participants offloading their holdings amid weak demand in the physical market and softer global crude prices. The correction follows a recent rally in oil prices that had been fuelled by geopolitical tensions in West Asia.

International crude benchmarks also remained under pressure. West Texas Intermediate (WTI) crude was trading 1.19 per cent lower at USD 81.63 per barrel, while Brent crude, the global benchmark, slipped 1.27 per cent to USD 87.24 per barrel.

The fall in global oil prices has been attributed to easing concerns over potential supply disruptions, with optimism surrounding renewed diplomatic engagement with Iran helping reduce the geopolitical risk premium in the market. Traders are also closely monitoring demand prospects in major consuming economies and production decisions by key oil-producing nations.

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For India, which imports more than 85 per cent of its crude oil requirement, softer crude prices are generally considered positive as they help reduce the import bill, ease inflationary pressures and provide some relief to the country's fiscal and current account balances. However, analysts expect oil prices to remain volatile amid evolving geopolitical developments and changing global demand-supply dynamics.

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