Crude futures snap rally, drop 2% on diplomatic progress

Crude oil prices fell nearly 2% in futures trade on Thursday, snapping a three-session rally as easing geopolitical tensions in West Asia weighed on market sentiment.

 On the MCX, the most-active June crude oil contract declined ₹179, or 1.94%, to ₹9,061 per barrel. Trading volume stood at 12,444 lots.Analysts said domestic crude futures came under pressure after Israel and Lebanon agreed to a conditional ceasefire, raising hopes of reduced supply disruptions in the region.

  The development also strengthened expectations of progress in efforts to resolve tensions involving Iran and potentially reopen the Strait of Hormuz, a critical route that handles nearly one-fifth of global crude oil shipments. Global benchmark prices also moved lower.  Brent crude for August delivery fell 0.61% to $97.21 per barrel, while US benchmark West Texas Intermediate crude slipped 0.57% to $95.47 per barrel.

  According to market experts, investors remain cautious despite the ceasefire announcement, as geopolitical risks have not completely disappeared.   Israeli Defence Minister Israel Katz said military operations in southern Lebanon would continue, highlighting lingering uncertainties in the region.