New Delhi, 10 November (H.S.): Crude oil prices continued their downward trajectory in the international energy market amid growing expectations of a de-escalation in geopolitical tensions. Oil prices had slipped to a three-month low on Monday, and the weakness persisted during Tuesday’s trading session. The sharp decline is primarily attributed to a recent statement by US President Donald Trump, in which he indicated that no further attacks on Iran would be necessary.
Following the latest decline, Brent crude has fallen below the psychologically significant threshold of $90 per barrel. At around 1 pm Indian Standard Time, Brent crude had dropped by $3.39, or 3.66 per cent, to $89.18 per barrel, compared with its previous closing price of $92.57. Although prices recovered marginally later, Brent crude was trading at $89.88 per barrel at 4:15 pm, down $2.69, or 2.91 per cent.
Similarly, US crude benchmark West Texas Intermediate (WTI) also witnessed a substantial decline. WTI crude fell by $2.97, or 3.42 per cent, to $83.88 per barrel, against its previous closing price of $86.85. It subsequently recovered some ground and was trading at $84.90 per barrel at 4:15 pm, down $1.95, or 2.25 per cent.
A review of the recent movement in crude oil prices shows that Brent crude had reached a six-month high towards the end of October. However, international prices have been declining steadily since then. The latest weakness is being attributed primarily to the outcome of the US midterm elections and the subsequent shift in President Donald Trump’s stance on the prospect of a US war with Iran. The change in his approach has significantly strengthened expectations that the conflict with Iran could come to an early end.
Market experts believe that the election results have considerably narrowed Trump’s options for launching a major military campaign against Iran. As a result, the geopolitical risk premium factored into oil prices is gradually diminishing.
However, analysts also caution that in the absence of a concrete agreement with Tehran, Brent crude prices may continue to remain above $85 per barrel.
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Hindusthan Samachar / Jun Sarkar
