Crude oil prices fell quickly on Wednesday, crashing by 6 per cent to hit their lower circuit level in futures trade, tracking weak global benchmarks after the US and Iran announced a two-week ceasefire. A lower circuit is the lowest price limit allowed in a day to fall. Once the price hits this level, it cannot fall further, and trading may pause. It exists to prevent panic crashes.
On the Multi Commodity Exchange (MCX), crude oil futures for the April delivery slumped by Rs 640, or 6 per cent, to Rs 10,029 per barrel — its lower circuit limit. Similarly, the May contract declined by Rs 565, or 6 per cent, to Rs 8,860 per barrel, also hitting its lower circuit limit amid aggressive selling.
Globally, oil prices fell after the ceasefire announcement between the US and Iran, which is expected to restore supply flows through the Strait of Hormuz — a key transit route for nearly one-fifth of global oil shipments (20 per cent).
West Texas Intermediate (WTI) crude futures for May delivery tumbled by USD 17.11, or 15.15 per cent, to USD 95.84 per barrel, while Brent oil for the June contract plunged by USD 14.52, or 13.29 per cent, to USD 94.75 per barrel in New York.
Analysts said crude prices cooled after geopolitical risk premiums unwound following the easing of tensions in West Asia.
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