MCX Crude Oil: Crude oil prices in India have seen a very sharp rally in the past few days. MCX crude oil futures have surged about 62% in just six trading sessions. Because of this sudden jump many investors are now asking one big question. Should they buy crude oil now or stay away from the market?
The big rise in MCX prices is mainly linked to the strong move in global oil markets. International crude prices have been moving wildly due to growing tensions in the Middle East and disruptions in important oil supply routes.
Recently WTI crude prices showed extreme volatility. The price first surged to $119.48 per barrel and then suddenly dropped to around $96.45 before stabilising near $103.32. Such a $23 swing in a single session is considered one of the most dramatic reversals seen in global oil trading.
Why Oil Prices are Rising?
The main reason behind the oil rally is the supply risk coming from the Persian Gulf region. One of the biggest concerns is the Strait of Hormuz, which is one of the most important oil shipping routes in the world.
Reports say about 80% of oil tanker traffic through this route has stopped due to security concerns. Since a large part of global oil supply moves through this narrow passage the disruption has created panic in energy markets.
At the same time production problems in major oil producing countries have made the situation worse. Iraq’s oil output has reportedly fallen sharply from around 4.3 million barrels per day to about 1.3 million barrels per day. This means nearly 3 million barrels per day of supply may have disappeared from the market.
Kuwait has also reduced production from its normal level of around 2.6 million barrels per day as a precaution, reported Economic Times. In addition operations linked to QatarEnergy remain under force majeure while Iranian linked military activity continues targeting infrastructure in the Gulf region.
Because of these risks traders rushed to buy crude oil futures which pushed global prices higher. Since MCX crude contracts follow international benchmarks like WTI and Brent the rally also lifted crude prices sharply in the Indian market.
Why Prices Suddenly Fell after the Surge?
Even though supply risks remain high oil prices dropped sharply later in the trading session. This happened after news reports suggested that G7 countries were discussing releasing oil from emergency reserves.
The reports mentioned a possible release of 300 to 400 million barrels from strategic petroleum reserves. As soon as this headline appeared many traders started selling crude futures. Automated trading systems also reacted quickly which pushed prices lower.
However an important detail is that no official decision has been taken yet. Governments are only discussing the idea of using emergency stockpiles to stabilise the market. No barrels have actually entered the market so far.
5 Major Credit Card Rule Changes in New Tax Draft from April 1
Should Investors Buy Crude Oil?
The big question for investors is whether this rally in MCX crude oil can continue. Experts say the situation is very uncertain right now.
On one side the supply shock from the Middle East is real. If shipping disruptions in the Strait of Hormuz continue oil prices could remain elevated. Global oil demand is expected to reach about 104.9 million barrels per day in 2026 according to the International Energy Agency. Any major supply disruption can therefore push prices higher.
On the other side governments could release oil from emergency reserves to cool the market. A large coordinated release by G7 countries could temporarily increase supply and push prices lower.
Volatility
Another factor is volatility. Oil prices are currently reacting quickly to every geopolitical headline. This means prices can move sharply in both directions within a short period.
Because of this many market experts say investors should be careful. The recent 62% jump in MCX crude oil futures shows how fast prices can rise but it also shows how risky the market can be during geopolitical crises.
