Crude oil yesterday settled lower by -0.98% at Rs 5439, influenced by renewed oversupply concerns stemming from reports that OPEC+ might increase production in the coming month. This development has compounded the pressures arising from the ongoing U.S. government shutdown and a decline in seasonal demand. Iraq, the second-largest producer within OPEC, is set to increase its production capacity to 5.5 million barrels per day by the end of the year, up from the current 4.4 million bpd, thereby intensifying supply concerns.

Furthermore, Iraq has reinstated crude exports from the Kurdistan region through the Iraq-Turkey pipeline following an extended hiatus, thereby reinstating flows of approximately 180,000–190,000 bpd to Turkey’s Ceyhan port. The U.S. Energy Information Administration reported an increase of 1.8 million barrels in crude stocks, bringing the total to 416.5 million, which exceeded expectations of a more modest 1 million-barrel rise. Gasoline inventories experienced a significant increase of 4.1 million barrels, reaching 220.7 million, which was well above forecasts. Meanwhile, distillate stocks saw an uptick of 578,000 barrels, contrary to expectations of a drawdown.

Refinery crude runs decreased by 308,000 bpd, with utilization rates declining to 91.4%, contributing to the prevailing bearish sentiment. Net U.S. crude imports increased by 71,000 bpd. OPEC’s monthly report, however, upheld its robust oil demand growth projections for this year and the next, attributing this to strong global economic momentum anticipated in the latter half of 2025.

Crude oil is currently experiencing renewed selling pressure, evidenced by a 10.29% increase in open interest to 14,256, alongside a price decline of Rs 54. Support is established at Rs 5398, with a breach below this level indicating a potential decline to Rs 5358. Conversely, resistance is positioned at Rs 5470, and an upward movement may challenge the Rs 5502 mark.