Crude oil prices near $100 again as Strait of Hormuz remains constrained

Mumbai: Global crude oil prices edged higher to nearly $100 a barrel on Wednesday as traders and investors analysed the outlook for US-Iran peace talks following US President Donald Trump’s announcement to extend a fragile ceasefire, even as the Strait of Hormuz remained constrained.

International benchmark Brent crude futures traded at $99.29 per barrel, up 0.82 per cent, while US West Texas Intermediate (WTI) rose 1.15 per cent to $90.71.

Both benchmark contracts had gained around 3 per cent in the previous session.

On the Multi Commodity Exchange (MCX), crude oil declined from previous close levels, hitting an intraday low of Rs 8,382, down 0.65 per cent or Rs 55 as of around 10:30 am.

Market sentiment remained cautious after Trump said he would indefinitely extend the ceasefire with Iran to allow more time for negotiations, after initially setting a two-week period.

Moreover, the naval blockade continued, with the Strait of Hormuz remaining constrained.

In a social media post, Trump claimed that Iran was ‘collapsing financially’ and ‘losing $500 million a day’, adding that Tehran was keen to reopen the Strait of Hormuz.

Shipping activity through the Strait of Hormuz — a critical route for nearly 20 per cent of global energy supplies — remained largely stalled, with minimal vessel movement reported in the past 24 hours, according to reports.

Adding to tensions, Iran has indicated it may attempt to break the blockade.

In equities, markets showed mixed performance globally. Domestic equities traded lower, with both benchmark indices, Sensex and Nifty, declining about 1 per cent each amid selling pressure in IT, banking and auto stocks such as Infosys, HCL Tech, Tech Mahindra, ICICI Bank, HDFC Bank, Eicher Motors and M&M.

On the global front, markets traded mixed. In Asia, the Nikkei rose 0.61 per cent, while the Hang Seng declined 1 per cent and the KOSPI traded marginally lower.

In the US, Wall Street closed in negative territory, with the S&P 500 falling 0.63 per cent to 7,064 and the Nasdaq ending 0.6 per cent lower at 24,259.96.

IANS