Daijiworld Media Network – New Delhi
New Delhi, Aug 8: Crude oil prices are likely to remain volatile next week as markets track developments surrounding the Strait of Hormuz, while the Indian rupee could strengthen further against the US dollar if geopolitical risks remain contained, commodity market experts said on Saturday.
Brent crude futures rose 1.29 per cent to $83.55 a barrel on Friday, but remained below the previous week’s close of $90.12. US West Texas Intermediate (WTI) crude for September delivery settled at $78.18 a barrel, down from $84.67 at the end of the previous week.
The energy market witnessed sharp swings during the week as investors reacted to changing expectations over a possible agreement to reopen shipping through the Strait of Hormuz, a crucial global oil transit route.
WTI crude fell sharply at the beginning of the week after US President Donald Trump paused a planned strike on Iran and opted to pursue a diplomatic agreement. Prices later recovered as markets assessed reports of progress towards a temporary arrangement for shipping through the strategic waterway.
Experts said a confirmed agreement to reopen the Strait of Hormuz could put further downward pressure on crude prices, while a renewed escalation in tensions could quickly bring back a geopolitical risk premium.
In the domestic market, MCX crude oil declined to around Rs 7,100 before recovering to close near Rs 7,400.
Commodity market experts see immediate resistance for MCX crude at Rs 7,500-7,550, while the Rs 7,380-7,300 range is expected to provide near-term support.
A sustained break below the support zone could drag MCX crude towards Rs 7,250, with a stronger base seen around Rs 7,100-7,000, they said.
Meanwhile, the Indian rupee strengthened during the week, with the USD/INR pair settling around Rs 95.2 after touching a low of nearly Rs 94.9.
Analysts said the rupee remains technically supported as USD/INR trades below its long-term ascending trendline. A sustained break below Rs 94.9 could strengthen the rupee further towards Rs 94.7-94.5.
On the upside, Rs 95.2-95.4 is seen as an immediate resistance zone for USD/INR. A move above this range could push the pair towards Rs 95.5-95.7, signalling renewed weakness in the rupee.
Technical indicators are also favouring the rupee, with the Relative Strength Index (RSI) easing from overbought levels and the Moving Average Convergence Divergence (MACD) indicating slowing bullish momentum in USD/INR.
However, experts said the overall outlook will remain dependent on movements in the US dollar, crude oil prices, foreign portfolio flows and geopolitical developments.
