Crude Futures Rise For Fourth Straight Session As Strait Of Hormuz Tensions Fuel Oil Rally

New Delhi: Crude oil futures rose for the fourth straight session, increasing by Rs 57 to Rs 8,145 per barrel on Wednesday, tracking firm global trends as renewed risks around the Strait of Hormuz deepen concerns over the flow of energy supplies from West Asia.

On the Multi Commodity Exchange (MCX), crude oil for September delivery traded higher by Rs 57, or nearly 1 per cent, to Rs 8,145 per barrel in 11,535 lots."MCX crude oil futures extended its gains for the fourth consecutive session as uncertainty over Middle East supplies and Strait of Hormuz shipping continued to support oil prices," Gaurav Garg, Head of Research at Lemonn Markets Desk, said.

The geopolitical uncertainty was equally visible in the international markets.Brent oil futures for October delivery increased by nearly 1 per cent to trade at USD 91.65 per barrel on the Intercontinental Exchange.

In addition, Comex West Texas Intermediate crude for the same month contract went up 1 per cent to USD 85.65 per barrel on the New York Mercantile Exchange.

Brent has held above USD 91 per barrel, for a third straight day after the 60-day ceasefire window between the US and Iran expired without an agreement, said Anindya Banerjee, Head of Commodity and Currency Research at Kotak Neo (formerly Kotak Securities).

The British military's UK Maritime Trade Operations centre on Tuesday said a merchant vessel was struck by an unknown projectile while transiting the Strait of Hormuz, resulting in a crew casualty.

Analysts said the attack on the vessel has added another layer of uncertainty to an already fragile supply outlook, raising concerns over potential disruptions to the flow of crude oil and refined products through vital shipping lane.

Meanwhile, Iran has laid down conditions for reopening the waterway, including the release of frozen assets, sanctions relief and lifting of the naval blockade, Banerjee said.

Saudi Aramco has resorted to some ship-to-ship transfers off the UAE coast, a slower and more expensive route.

The market is also flashing signs of a tightening squeeze: near-month crude is trading about USD 4 above contracts two months out, while Gulf diesel flows have fallen around 80 per cent from last year, compared with a 48 per cent decline in crude flows, he said.

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