Oil prices continued to rise on Thursday amid concerns that supply from the crucial Middle East producing region could remain constrained for longer, as negotiations to end the US-Israel conflict with Iran have stalled.
Brent crude futures for June climbed to $122 a barrel, following a 6.1% jump in the previous session. The June contract, which marked its ninth straight day of gains, expires on Thursday, while the more actively traded July contract rose 94 cents, or 0.85%, to $111.38 after advancing 5.8% in the prior session.
Meanwhile, US West Texas Intermediate (WTI) crude futures for June gained 63 cents, or 0.59%, to $107.51 a barrel, after surging 7% in the previous session and rising in eight of the last nine trading sessions.
Back home, crude oil prices on Multi Commodity Exchange (MCX) also witnessed a similar upward movement, crossing ₹10,000 per barrel mark. MCX crude oil prices surged as much as 3% to ₹10,410 a barrel.
What's driving crude oil prices today?
US President Donald Trump held talks with oil companies on Wednesday to explore ways to cushion the impact of a potential months-long US blockade of Iran's ports, a White House official, was quoted as saying by Reuters, raising market concerns about prolonged disruptions to oil supplies.
The discussions came amid a stalemate in efforts to resolve the conflict, which has resulted in thousands of deaths and triggered one of the largest energy disruptions globally, according to the Reuters report.
Tehran has largely restricted shipping through the Strait of Hormuz - a critical route for Middle Eastern energy exports - allowing mainly its own vessels since US and Israeli airstrikes on Iran began on February 28. More recently, the US has moved to blockade Iranian ships.
On the supply front, the OPEC+ alliance - comprising OPEC members and allied producers - is expected to approve a modest increase of about 188,000 barrels per day in output quotas at its upcoming meeting on Sunday, sources were quoted as saying by Reuters.
The meeting follows the United Arab Emirates' planned exit from OPEC, effective May 1, which could weaken the group's influence over oil prices. While the UAE's departure may enable it to boost production once exports resume, analysts believe it is unlikely to significantly alter market fundamentals this year, particularly given the ongoing Hormuz disruption and other war-related supply constraints.
Crude oil prices outlook
Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, believes that Brent has already printed near $122 with the curve in deep backwardation - a 6.5% backwardation between dated and July, which is the textbook signature of genuine physical scarcity, not speculative excess.
"Resistance at $125; a sustained break opens $135-140. Support sits at $100. As long as Hormuz remains throttled and the US naval blockade on Iran holds, the war premium stays bid," Banerjee said.
On the technical outlook, Ponmudi R, CEO of Enrich Money, said that MCX Crude Oil is trading above the ₹9,400 level, pulling back slightly from yesterday's high near ₹9,600 while continuing to push higher along the ascending trend-line.
"A sustained break above ₹9,600 could open the path toward ₹9,750- ₹10,000. On the downside, ₹9,200 acts as immediate support, with ₹9,000- ₹8,800 as stronger floors should momentum fade. The near-term bias remains bullish, underpinned by trendline support and ongoing supply disruption concerns in the Strait of Hormuz," he said.
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