Crude oil prices experienced a decline of 0.18%, settling at Rs 5,427, as traders took the opportunity to realize profits after a significant rally fueled by escalating geopolitical tensions and new U.S. sanctions targeting major Russian producers Rosneft and Lukoil. The sanctions, designed to limit Moscow’s oil revenues in the context of the Ukraine conflict, have led to disruptions in global supply chains, with reports indicating that Chinese state oil firms have ceased purchases of Russian crude and Indian refiners are considering reductions in imports.

The European Union has escalated sanctions aimed at Russia’s energy infrastructure, while continuous Ukrainian assaults on refineries and pipelines have exacerbated supply uncertainty. The International Energy Agency has adjusted its forecast for global oil supply growth in 2025 upward, in light of OPEC+’s decision to boost production. However, it has also revised its demand outlook downward, reflecting a less robust economic environment.

Data indicated an increase in crude inventories by 3.5 million barrels, reaching a total of 423.8 million. In contrast, gasoline and distillate stocks experienced declines of 267,000 and 4.5 million barrels, respectively. Refinery utilization decreased to 85.7%, indicative of reduced crude processing activities. In the interim, OPEC has upheld its projections for oil demand growth, indicating a reduced anticipated deficit for 2026 as OPEC+ persists in reversing output reductions, thereby amplifying concerns regarding short-term surpluses.

The crude oil market is currently experiencing long liquidation, as evidenced by a 4.54% decline in open interest, bringing it to 14,095. Immediate support is positioned at Rs 5,380; a decline beneath this level may lead to a test of Rs 5,332. Conversely, resistance is identified at Rs 5,493, with a breach above this threshold potentially driving prices toward Rs 5,558.