Commodity Radar: Volatile crude has limited near-term upside, says Religare analyst; bull and base-case scenarios decoded

Crude oil prices reclaimed the $100-a-barrel mark on Thursday after plunging sharply on Wednesday. Benchmark crude prices rose after Iran rejected President Donald Trump’s claims that the warring sides were negotiating to broker peace.

Brent slipped below the $100 level on hopes of a likely agreement between Iran and the US. Brent crude futures fell 7% to an intraday low of $97.18 per barrel, while US WTI crude dropped over 6% to $86.72 on Wednesday.

Indian commodity markets are closed in the morning session today on account of the Shri Ram Navami holiday. They will resume trading in the evening session from 5 pm. They are expected to open gap-up, taking cues from developments in international markets.


US WTI was trading at $91.84 per BBL, up $1.52 (1.68%), while Brent oil was hovering near $104.02, up $1.80 (1.76%), around 11 am India time.

April crude oil futures on the MCX fell by Rs 560, or 6.4%, intraday to hit the day’s low of Rs 8,175 per barrel before closing at Rs 8,511, down by Rs 225, or 2.58%.

Ajit Mishra, Senior Vice President – Research at Religare Broking, said the oil market is currently showing limited upside potential after a volatile start to the week, with participants weighing a temporary diplomatic pause against a blockaded Strait of Hormuz.

“Oil is trading on a softer note amid signs of progress toward a resolution of the Middle East conflict, including pledges for peace with the aid of Pakistan, Qatar, and others. Also, President Trump continues to insist that his administration is in talks with Iran,” Mishra said.

In his view, the upside potential has reduced lately following Trump’s announcement of a five-day pause on planned strikes against Iranian energy infrastructure. “We are currently in the third day of the five-day pause announcement. This indicates that unless the US-Iran talks yield a ceasefire or lead to the reopening of the Strait, markets are likely to maintain a cautious stance,” the Religare expert said.

He, however, acknowledged the closure of the Strait of Hormuz as a red flag that could potentially reverse the current softness if the situation worsens after the five-day deadline ends.

Recent reports indicate that Saudi Arabia and the UAE are taking a firmer military stance against Iran, suggesting continued supply disruption risks.

All in all, the oil market is likely to see modest upside unless there is a breakthrough in Iran negotiations or a sharp drop in EIA inventory data, the analyst said.

Technical outlook

After a long period of consolidation between $60 and $75, WTI crude oil posted a significant rally, recently peaking near $120 before cooling off to current levels.

MCX futures prices on the weekly chart remain above the key Exponential Moving Averages (EMAs), signaling positive momentum ahead, Mishra said.

His advice to traders is to wait for a retracement to support levels in the coming days as long as ceasefire negotiations continue.