Crude oil yesterday concluded with a slight decline of -0.09% at Rs 5,522, as the market navigated the interplay between geopolitical concerns and apprehensions regarding oversupply. On the supply front, Iraq, the second-largest producer within OPEC, has ramped up exports in accordance with the OPEC+ agreement, with September shipments anticipated to reach between 3.4 and 3.45 million barrels per day. Its intention to increase production to 2.559 million bpd starting in October, in accordance with OPEC+’s recent quota adjustment designed to reclaim market share.

In the interim, geopolitical tensions in the Middle East persisted at heightened levels in anticipation of a UN summit concerning the “two-state solution,” although these risks were mitigated by indications of supply growth. Speculative positioning has also undergone a transformation, with money managers increasing their net long positions in U.S. crude futures and options by 30,855 contracts, highlighting a resurgence in bullish sentiment. The EIA reported a significant crude stock draw of 9.3 million barrels, exceeding expectations and reducing inventories to 415.4 million barrels.

Gasoline inventories decreased by 2.3 million barrels, whereas distillate stocks experienced a significant increase of 4 million barrels, indicating a divergence in product balances. Refinery utilization decreased to 93.3%, with throughput declining by 394,000 bpd. Cushing hub inventories experienced a decline of 296,000 barrels, while net U.S. crude imports saw a substantial decrease of 3.11 million bpd.

Crude oil is currently experiencing new selling pressure, evidenced by a remarkable increase in open interest of 1000.08% to 12,981, alongside a price decline of Rs 5. Support is established at Rs 5,465, with additional downside risk to Rs 5,407, while resistance is noted at Rs 5,578; a breach above this level could lead to extended gains toward Rs 5,633.