Crude oil yesterday settled lower by -0.73% at Rs 5,569 as traders assessed the implications of increased global supply in conjunction with the possibility of reduced geopolitical tensions. Sentiment shifted to a more cautious stance following reports suggesting that OPEC+ could sanction an additional 137,000 bpd output increase for November during its forthcoming meeting.

Additional pressure emerged as Iraq’s Kurdistan region recommenced exports through the Iraq–Turkey pipeline following a two-and-a-half-year hiatus, which could enhance global supply. On the geopolitical front, optimism surrounding a tentative US-brokered Gaza peace plan has contributed to a reduction in the risk premium; however, uncertainties persist as Hamas has yet to provide its agreement. From a supply–demand perspective, data presented a mixed picture.

Crude inventories experienced an unexpected decline of 607,000 barrels, bringing the total to 414.8 million, contrary to expectations for an increase. Additionally, gasoline and distillate stockpiles also saw a reduction, indicating a rise in refined fuel demand. Nonetheless, crude inventories at Cushing increased by 177,000 barrels, while refinery utilization experienced a minor decline to 93%. Net U.S. crude imports increased by 1.6 million bpd, underscoring changing trade dynamics. In a broader context, OPEC has upheld its robust projections for oil demand growth for the current year and the following year, attributing this to strong global economic momentum.

Crude is currently experiencing renewed selling pressure, evidenced by a 2.36% increase in open interest to 10,829, alongside a price decline of Rs 41. Immediate support is identified at Rs 5,518, with the potential for further decline towards Rs 5,467. Resistance is currently positioned at Rs 5,625, and a breakout above this level could potentially lead to a test of Rs 5,681.