Crude oil futures on Tuesday dropped 0.77 per cent to Rs 4,503 per barrel after soaring in previous sessions following tensions between the US and Iran.
On the Multi Commodity Exchange, crude oil for January delivery traded lower by Rs 35, or 0.77 per cent, at Rs 4,503 per barrel in 23,748 lots.
Crude oil for February delivery was down Rs 38, or 0.84 per cent, at Rs 4,498 per barrel with an open interest of 922 lots.
According to analysts, markets are awaiting Iran's next step after the killing of its top commander.
The tensions in Middle East region rose after US killed top Iranian commander Qasem Soleimani following an air strike on Baghdad's international airport on Friday.
Soleimani's killing was the most dramatic escalation yet in spiralling tensions between Iran and the US, already hit by serious differences over Tehran's ambitious nuclear programme.
Globally, the West Texas Intermediate (WTI) was trading lower by 0.93 per cent at USD 62.68 per barrel.
Meanwhile, Brent crude, the international benchmark, edged lower by 1.07 per cent to USD 68.18 per barrel in New York.
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