Crude oil futures traded lower on Thursday morning even as the United States and Iran continued exchanging strikes in West Asia, according to a report by The Hindu Business Line.
Price Movement Across Key Benchmarks
At 9:39 am on Thursday, October Brent oil futures on the Intercontinental Exchange (ICE) were at $87.27 per barrel, down 0.93% from the previous close. September West Texas Intermediate (WTI) crude futures on the New York Mercantile Exchange (NYMEX) stood at $83.72 per barrel, a decline of 0.88%.
On India's Multi Commodity Exchange (MCX), August crude oil futures opened at ₹8,020 per barrel, down 1.16% from the previous close of ₹8,114. September crude futures traded at ₹7,827, down 0.90% from the prior close of ₹7,898.
| Contract | Price | Change (%) |
|---|---|---|
| ICE Brent October | $87.27 | -0.93% |
| NYMEX WTI September | $83.72 | -0.88% |
| MCX Crude August | ₹8,020 | -1.16% |
| MCX Crude September | ₹7,827 | -0.90% |
Geopolitical Supply Risk: US-Iran Strikes Escalate
The price drop occurred despite a significant escalation in military action. US Central Command stated that its forces completed a heavy wave of strikes against Iran at 10 pm ET on July 29, in response to attempted missile attacks on US forces the previous day, according to the source.
US assets struck dozens of Islamic Revolutionary Guard Corps (IRGC) targets inside Iran, including military command centres, missile and drone facilities, coastal surveillance and defence sites, and maritime capabilities. The strikes aimed to further diminish threats posed by Iran and its proxies to American forces, commercial shipping, and neighbouring Gulf countries.
On July 28, IRGC forces launched multiple ballistic missiles from Iran in an attempted surprise attack on US forces based in West Asia. All Iranian missiles were successfully intercepted, US Central Command reported.
EIA Inventory Report: Crude Stocks Fall Sharply
Counterbalancing the geopolitical risk, the US Energy Information Administration's (EIA) weekly petroleum status report for the week ending July 24 showed a substantial draw in crude inventories, the source noted.
- US commercial crude oil inventories decreased by 7.2 million barrels from the previous week.
- At 404.5 million barrels, stocks were approximately 6% below the five-year average for this time of year.
- Total motor gasoline inventories edged up but remained 7% below the five-year average.
- Distillate fuel inventories increased by 1.1 million barrels but were still 10% below the five-year average.
Demand Indicators: Mixed Signals from Product Supplied
Total products supplied in the US over the last four-week period averaged 20.3 million barrels per day, down 2.3% from the same period last year, signaling potential demand weakness.
| Product | Four-week average (million bpd) | YoY change |
|---|---|---|
| Motor gasoline | 8.9 | -0.3% |
| Distillate fuel | 3.7 | +4.7% |
| Jet fuel | Not specified | +5.8% |
Motor gasoline product supplied averaged 8.9 million barrels per day, down 0.3% year-on-year. Distillate fuel product supplied averaged 3.7 million barrels per day, up 4.7% from the prior year. Jet fuel product supplied rose 5.8% compared with the same four-week period last year.
Market Outlook
The simultaneous influence of escalating geopolitical tensions and a supportive inventory draw has created an ambiguous near-term outlook. While the US-Iran strikes heighten supply risk in the world's key producing region, the unexpected drop in US crude stocks and mixed demand data provide both support and headwinds. Traders will monitor further developments in West Asia and upcoming EIA releases for directional cues.
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