Crude Oil Prices Extend Losses as US-Iran Talks Raise Hopes of Hormuz Reopening | Commodity Market Today

Crude oil prices traded lower for a second straight session on Wednesday as hopes of progress in negotiations between the United States and Iran eased concerns over oil supply disruptions in the Middle East.

Brent crude slipped more than 1% to trade near $78 a barrel, while US West Texas Intermediate (WTI) crude hovered around $74.5 a barrel. On the Multi Commodity Exchange (MCX), crude oil futures remained lower after falling more than 5% in the previous session.

Why Are Oil Prices Falling Today?

Oil prices have retreated sharply over the past two sessions after diplomatic efforts gathered pace to restore shipping through the Strait of Hormuz.

According to Kotak Neo Commodity Research, growing optimism over a possible agreement between the US and Iran has eased immediate supply concerns. Prices also softened as Saudi Arabia increased crude exports through the Red Sea and tanker traffic through the Bab el-Mandeb route improved.

US President Donald Trump has said discussions are continuing, while Oman remains involved in efforts to broker an agreement. While the talks have improved market sentiment, there is still no clarity on when normal shipping through the Strait of Hormuz will resume.

The strategic waterway carries a significant share of global crude shipments, making any disruption a key risk for oil markets.

US Inventory Build Adds Pressure

The American Petroleum Institute (API) reported a 2.7 million-barrel increase in US crude inventories last week. Stockpiles at Cushing, Oklahoma, the delivery point for WTI crude, also increased.

Markets are now awaiting official inventory data from the US Energy Information Administration. If government data also points to a build in crude stockpiles, it could reinforce expectations of comfortable near-term supplies.

MCX Crude Oil Technical Outlook

According to Kotak Neo Commodity Research, crude oil is expected to remain under pressure in the near term as easing concerns over supply disruptions continue to weigh on prices.

The research firm said benchmark crude has extended its decline after optimism over a potential US-Iran agreement to reopen the Strait of Hormuz eased immediate supply concerns. Higher Saudi crude exports through the Red Sea, improving tanker traffic via the Bab el-Mandeb route and the American Petroleum Institute's estimate of a 2.7 million-barrel build in US crude inventories have also added to the weak sentiment.

For the domestic market, MCX Crude Oil (August) is expected to trade with a sideways-to-bearish bias in the ₹6,775-₹7,470 range. Kotak Neo said progress in diplomatic negotiations and a recovery in oil supplies could keep prices under pressure, while any setback in talks or a larger-than-expected draw in US crude inventories may provide support to prices.

Oil Market Awaits Fresh Direction

Markets are now waiting for official US inventory data after the American Petroleum Institute estimated a 2.7 million-barrel increase in crude stockpiles last week. A larger-than-expected build could add to the recent weakness in oil prices, while a surprise draw may offer support.

Traders will also continue to track developments around the Strait of Hormuz, where negotiations remain underway. Any disruption to shipping or setback in diplomatic efforts could quickly change sentiment in the oil market.

Upcoming US economic data will also remain on investors' radar for signals on fuel demand and the Federal Reserve's policy outlook.

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