Home / Industry / Energy /  Crude prices ease from multi-year highs on hopes of US-Iran nuclear deal
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New Delhi: Crude oil prices have declined from the highs touched on Thursday amid hopes of a nuclear deal between the US and Iran.

Brent crude was trading around $112 per barrel after hitting $119.84 on Thursday, the highest level since 2013. It later closed at $110.46 per barrel.

In early trade on Friday, oil prices, however, increased from their closing levels of Thursday.

At 11.05 a.m., the May contract of Brent futures on the Intercontinental Exchange (ICE) was trading at $112.16, higher by 1.54% from its previous close. The April contract of West Texas Intermediate (WTI) on NYMEX rose 2% to $109.82 per barrel.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd said, "Crude oil showed profit taking at higher levels on signs that high-stakes talk to revive a nuclear deal of the United States with Iran may conclude soon. If the deal happens then Iranian oil will return to the international markets and could cap gains."

Iran is the ninth-largest oil-producing nation in the world, but economic sanctions on the country have led to lower production compared to its potential.

However, the ongoing geopolitical tensions and the conflict are likely to keep oil prices elevated in the days ahead.

"We expect crude oil prices to remain volatile in today’s session and if war intensified between Russia-Ukraine could continue to support oil prices," he said.

Ravindra Rao, head of Commodity Research at Kotak Securities was of the view that the second round of talks between Russia and Ukraine also calmed nerves in the highly volatile oil market on Thursday.

He said that the prices bounced back on Friday, as Russia-Ukraine tensions intensified following Russia's attack on Ukraine's nuclear plant.

"Crude has rallied over 25% in just over a week and market players are now assessing possibility of the rally continuing. The general bias however remains positive unless there are sincere efforts to de-escalate tensions," Rao said

On the domestic front, the surge in global crude prices is a major cause of concern with 85% of India's oil demand being met through imports. The Indian basket of crude, comprising Oman, Dubai and Brent crude was last recorded at $111.99 on Wednesday.

So far, the increase in crude oil prices has not been transferred to consumers as the retail fuel prices have been unchanged for over three months now on the buildup to the ongoing state assembly elections. However, market experts believe, as elections end, retail prices of petrol and diesel will be increased going ahead.

In the national capital, the retail price of petrol on Friday was 95.41 a litre, while diesel was sold for 86.67 per litre.

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