Oil prices retained most of the strong gains recorded in the previous session during early trading on Tuesday, 2 June, as uncertainty surrounding ceasefire negotiations between the United States and Iran and the possibility of the Strait of Hormuz reopening continued to support the market.
rose 6 cents, or 0.06%, to $95.04 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped 17 cents, or 0.18%, to $91.99 per barrel.
Both benchmarks had surged more than 5% in the previous session but trimmed their gains after US President Trump said he had received no information indicating that Iran was halting negotiations with Washington, while Israel had agreed to withdraw troops that were reportedly preparing for an attack in southern Lebanon.
However, back home, crude oil prices on (MCX) witnessed downward movement. MCX crude oil prices fell as much as 0.16% to ₹8,725 per barrel.
Why are crude oil prices rising?
US President Donald Trump said on Monday that discussions with Iran were still underway, even as Iran’s Tasnim news agency reported that Tehran had paused indirect negotiations with Washington.
According to a CNBC report, Trump indicated he would not be concerned if the talks had come to an end. However, he later posted on social media that negotiations with Iran were continuing and was quoted as saying by ABC News that he expects an agreement to extend the ceasefire and reopen the Strait of Hormuz within the next week, according to a post shared by the outlet on X.
Meanwhile, Lebanon announced a partial ceasefire between Hezbollah and Israel, marking a limited easing of tensions in a conflict that has contributed to the wider confrontation involving Iran.
Since the outbreak of the war, Iran has largely restricted non-Iranian shipping activity in and out of the Gulf, disrupting nearly one-fifth of global oil and liquefied natural gas trade and pushing energy prices sharply higher.
At the same time, US crude oil exports rose to a record 5.6 million barrels per day in May, driven by stronger demand from Asian and European refiners amid the escalating Middle East crisis, according to ship-tracking data released on Monday, as quoted by Reuters.
Crude oil price outlook
According to Kaynat Chainwala, AVP Commodity Research, Kotak Securities, oil markets have already experienced a substantial repricing of geopolitical risk. fell roughly 11% last week to near $91/bbl and recorded its steepest monthly decline since 2020, losing 19% in May. WTI also dropped more than 9% last week to approximately $87/bbl following reports of ceasefire progress.
“Until a deal is finalised and verified, expect continued headline‑driven volatility as any sign the 60‑day framework is moving toward formal sign‑off or collapsing could trigger sharp directional moves,” Chainwala added.
On the technical outlook, Ponmudi R, CEO of Enrich Money, said that MCX crude oil is trading above the ₹8,500 level, staging a technical bounce near the lower end of the ascending trendline structure that continues to provide structural support, with MACD and broader technical indicators suggesting a weakening of bearish momentum on the daily timeframe.
“Immediate resistance stands at ₹8,625– ₹8,650; a sustained move above this zone could trigger a recovery toward ₹8,700– ₹8,770. On the downside, ₹8,450– ₹8,390 acts as immediate support; a break below this area could extend the decline toward ₹8,300– ₹8,250. The near-term bias remains cautious, with direction largely driven by ongoing geopolitical developments,” Ponmudi said.
(With inputs from agencies)
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