Markets are also eyeing the forthcoming OPEC meet on 6th December at Vienna, which will help them take a consensus on oil production cuts
HSBC said in its fourth quarter Global Economics outlook that "our oil analysts believe there is now a growing risk it (crude) could touch $100 per barrel".
With crude prices soaring and many currencies in emerging markets, including India's rupee and Indonesia's rupiah declining, analysts warn that economic growth may be eroded
Vineeta Sharma of Narnolia Financial Advisors said sanction on Iran and strong seasonal demand in October will too impact crude prices in the near term.
Ravindra V Rao of Anand Rathi Commodities said with uncertain results of the US midterm November elections, there is every chance that the yellow metal starts to appreciate in the last four months of 2018
Rising oil prices and falling dollar-rupee puts pressure on the current account deficit. Iran can bring in much needed relief, but for that India will have to stand up against the US diktat
A weaker US dollar makes oil, which is priced in dollars, less expensive to buyers in other currencies.
Brent is heading for a 2 percent decline this week, a third consecutive weekly drop. WTI is on track for a seventh week of losses, with a fall of more than 3 percent.
Hareesh V of Geojit Financial Services said immediate support for natural gas is placed at Rs 185 mmbtu and resistance at Rs 220 mmbtu
Commodity prices rallied sharply between February and May 2018, which was beneficial to companies which are directly linked with like metals and select oil stocks, but falling prices is generally good for companies which use these commodities as their raw material.
Crude prices weakened in recent days as OPEC member Libya reopened its ports in the east and U.S. Secretary of State Mike Pompeo said Washington would consider granting waivers to some of Iran's crude buyers.
Base metals are under pressure in the international market due to tight monetary policy of the Federal Reserve
Concerns like supply disruptions in Libya and Canada, US officials statement saying all countries should stop Iranian crude imports from November pushed crude oil prices higher.
Next OPEC meet in December would be the key as the current decision is applicable till end 2018 only.
The S&P BSE Sensex closed 95 points higher or 0.28 percent at 34,427.20 while the Nifty50 ended 39 points higher at 10,565 on Thursday.
HPCL was the biggest loser among Nifty50 stocks, falling up to 7 percent followed by BPCL and IOC with 5 percent losses.
OPEC projected that global demand for oil would rise to 98.6 million barrels per day in 2018, from 97.01 million bpd last year.
High oil prices mean India imports inflation which would give an already hesitant Reserve Bank of India an excuse to delay rate cuts further. The government would like lower oil prices especially since important states are going in for election.
Indian companies who are basically suppliers of equipment or services tend to gain from increased investment in the sector.
London Brent crude for November delivery was down 1.1 percent at USD 49.44 a barrel after rising above USD 50 for the first time in two weeks and settling up 4.2 percent, on Thursday.
Tata Motors, Axis Bank, ICICI Bank, Asian Paints and Tata Steel were top gainers while TCS, Coal India, Wipro, Sun Pharma and ITC were major losers in the Sensex.
China's Shanghai and Hong Kong's Hang Seng were down over 0.4 percent whereas Japan's Nikkei closed 0.3 percent higher. Brent crude futures were down 1.77 percent at USD 49.98 a barrel and US futures fell 1.59 percent to USD 47.75 a barrel.
ONGC, Wipro, M&M, Tata Motors and HDFC were top gainers while NTPC, Axis Bank, Adani Ports, BHEL and Asian Paints were losers in the Sensex.
The market breadth was marginally positive as about 1303 shares advanced against 1133 declining shares on Bombay Stock Exchange.
Experts expect volatility to continue with some profit booking as the market rallied 7 percent in last two weeks. Federal Reserve meeting on June 14-15 and Britain's referendum on June 23 will be next key events to watch out for along with monsoon that hit southwest Kerala today.