Brent crude oil futures tumble over 5 pc to Rs 8 125 per barrel

     New Delhi, Nov 9 (PTI) Crude oil futures tanked over 5 per cent to Rs 8,125 per barrel on Monday as hopes of a diplomatic breakthrough between the US and Iran, along with prospects of recovering supplies from West Asia, dragged down global energy prices.

     On the Multi Commodity Exchange (MCX), crude oil futures for November delivery tumbled by Rs 429, or 5.02 per cent, to Rs 8,125 per barrel.

     The December contract also fell Rs 394, or nearly 5 per cent, to Rs 8,084 per barrel on the commodities bourse.

     The sharp decline reflected easing concerns over immediate supply as markets factored in the possibility of de-escalation in the West Asia conflict and a gradual restoration of oil supplies, said Ajit Mishra, SVP – Research, Religare Broking.

     However, the geopolitical situation remains fragile, with fresh attacks on shipping routes and energy infrastructure keeping supply risks alive. Expectations of a growing global supply surplus could also cap any sustained recovery in prices, he said.

     In international markets, West Texas Intermediate (WTI), the US benchmark for crude oil, fell by USD 3.45, or 4 per cent, to USD 87.38 per barrel.

     Brent oil futures for January delivery dropped USD 4.16, or 4.23 per cent, to USD 94.16 per barrel, slipping below the USD 95 mark.

     "Crude oil remained under pressure, with Brent trading below USD 95 per barrel and WTI near USD 88, as Trump indicated that additional military action against Iran would be unlikely provided ongoing negotiations continue to make progress," said Kaynat Chainwala, AVP – Commodity Research at brokerage firm Kotak Neo.

     She said President Donald Trump's remarks fuelled expectations of a potential diplomatic pathway, offsetting concerns over recent Houthi attacks on Saudi infrastructure and reports of disruptions to maritime traffic near the Strait of Hormuz.

     Ajit Mishra said for domestic markets, the correction in oil prices offers macroeconomic relief by easing inflationary pressures, reducing the current account burden and supporting currency stability.

     He added that the near-term outlook remained tilted towards consolidation with a downside bias, provided diplomatic progress continued and supplies gradually normalised.

     Chainwala said investors would closely track US-Iran negotiations, the resumption of shipping through the Strait of Hormuz and further attacks on regional energy infrastructure.

     Progress towards a diplomatic breakthrough, including talks in Washington involving Qatari officials, could extend the recent correction, while a breakdown in negotiations or fresh supply disruptions could bring back the geopolitical risk premium, she added.

(This story has not been edited by THE WEEK and is auto-generated from PTI)