Crude oil prices increased by 1.09%, closing at Rs 5,303. This rise was bolstered by a more optimistic outlook following U.S. President Donald Trump and Vice President JD Vance’s gentler approach towards China, which has sparked expectations for a reduction in trade tensions, notwithstanding the impending 100% tariffs and export controls scheduled for November 1. Trump’s assertion that the U.S. could “be fine with China” provided a sense of relief to markets, whereas his statements regarding the provision of long-range missiles to Ukraine introduced additional geopolitical risk to the global oil supply.

Nonetheless, the increases were constrained by apprehensions regarding heightened production levels, as OPEC and its partners augmented output by 630,000 barrels per day in September, which has sparked worries about a possible supply surplus in the latter part of the year. China’s crude oil imports experienced a decline of 4.5% in September, totaling 47.25 million tonnes, which indicates a weakening in demand. Meanwhile, data from the U.S. Energy Information Administration indicated that crude inventories increased by 1.8 million barrels to 416.5 million, surpassing expectations, while stocks of gasoline and distillates also experienced an uptick.

Refinery runs decreased by 308,000 barrels per day, while utilization rates fell to 91.4%. OPEC has upheld its strong demand forecast for 2025–26; however, the group’s quicker-than-anticipated supply growth may lead to a reduced market deficit of 50,000 barrels per day in 2026, significantly lower than previous projections.

Crude oil is currently experiencing short covering, evidenced by a 25.04% decline in open interest to 9,880 lots, alongside a price increase of Rs 57. Support is identified at Rs 5,258, and a decline below this level may lead to a test of Rs 5,214. Conversely, resistance is positioned at Rs 5,346, with a breakthrough potentially driving prices toward Rs 5,390.