New Delhi, March 25 (IANS) International crude oil prices witnessed a sharp decline on Wednesday amid growing hopes of a ceasefire in the West Asia region.

Brent crude futures fell 7 per cent to an intraday low of $97.18 per barrel, while US WTI crude dropped over 6 per cent to $86.72 as of 10:40 AM.

Experts said the recent correction in crude prices could offer some relief to India’s macroeconomic indicators, including inflation and the Current Account Deficit (CAD), even as technical indicators suggest key support levels are being tested.

“Commodity markets corrected sharply last week, with oil retreating from recent highs. Brent crude, which had touched levels near $101 per barrel, fell more than 10 per cent to around $91 per barrel, easing immediate concerns over India’s oil import bill, Current Account Deficit, and rupee pressures,” according to them.

They added that for India, every $10 per barrel movement in crude typically impacts the CAD by 0.3–0.5 percentage points of the GDP and raises CPI inflation by 20–30 basis points, depending on pass-through.

The analysts said US oil is currently hovering near the crucial $85–$87 support band, indicating a cautious undertone in the near term. A sustained move above $92–$94 levels could revive bullish momentum and push prices towards $98–$100, while a break below $85 may drag prices towards the $81–$82 range.

Overall, analysts maintain a ‘buy-on-dips’ stance as long as key support levels hold, though volatility is expected to persist amid geopolitical and macroeconomic developments.

The recent moderation in crude prices is seen as providing temporary relief to the rupee and inflation outlook, although risks remain.

“With a wide trade gap and elevated gold imports, any renewed spike in crude or capital outflows could quickly reignite depreciation pressures,” they said.

Meanwhile, US stock markets ended lower overnight, with the S&P 500 and Nasdaq declining 0.84 per cent and 0.37 per cent, respectively.

In contrast, Asian markets traded sharply higher. Japan’s Nikkei surged 3.26 per cent, South Korea’s KOSPI rose 3.36 per cent, and Hong Kong’s Hang Seng gained 1.30 per cent.

--IANS

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