Crude oil prices experienced a decline of 2.04%, settling at Rs 5,462 per barrel, as market participants responded to reports indicating a potential ceasefire deal in Gaza, which has contributed to a reduction in geopolitical tensions in the Middle East. U.S. crude inventories have increased for the second consecutive week, rising by 1.8 million barrels to reach 416.5 million barrels, despite remaining close to seasonal lows.

The EIA reported a decrease in stockpiles at the Cushing hub alongside reduced refinery runs. In contrast, gasoline inventories increased by 4.1 million barrels, and distillate stocks saw a rise of 578,000 barrels. This trend indicates weaker refining margins and a moderate recovery in demand.

OPEC+ has upheld its projection for global oil demand growth in 2025, attributing this to the persistent robustness of global economic activity. In August, the group increased crude output by 509,000 barrels per day, aligning with its strategy to reverse earlier production cuts. Saudi Arabia and Russia spearheaded this expansion to reclaim market share from U.S. shale producers. In August, Russia’s production increased to 9.17 million barrels per day, with officials suggesting that there is no pressing requirement for additional restrictions on diesel exports.

Crude oil is currently experiencing long liquidation, evidenced by a 4.58% decline in open interest to 11,259 contracts, alongside a price decrease of Rs 114. The commodity currently exhibits immediate support at Rs 5,414; a breach of this level could lead to a test of Rs 5,365. Conversely, resistance is identified at Rs 5,551, beyond which prices may advance toward Rs 5,639.