Crude oil prices declined by 1.99% to Rs 5,330, amid growing apprehensions regarding a possible supply surplus, following indications that OPEC+ might increase production once more in December. The producer alliance, spearheaded by Saudi Arabia, is said to be contemplating a slight increase in production to reclaim market share, which is overshadowing the optimism stemming from advancements in U.S.–China trade discussions prior to a significant meeting later this week.

Meanwhile, U.S. sanctions on Russian oil majors Rosneft and Lukoil continued to attract attention, with the objective of limiting Russian exports while avoiding a surge in prices. The IEA has adjusted its global supply growth forecast upwards and reduced its demand estimates, attributing these changes to subdued economic activity. It also indicated that oil consumption is expected to increase by approximately 700,000 barrels per day each year until 2026. Data indicates that U.S. crude inventories increased by 3.5 million barrels, reaching a total of 423.8 million, whereas stocks of gasoline and distillates experienced a decline.

Cushing hub inventories decreased by 703,000 barrels, refinery runs declined by 1.2 million barrels per day, and utilization rates fell to 85.7%. The recent sanctions imposed by the EU on Russia’s energy sector, coupled with the continued Ukrainian strikes on refineries, have contributed to heightened market uncertainty. In September, OPEC+ production rose by 630,000 bpd, reaching a total of 43.05 million bpd. This adjustment has effectively reduced the anticipated deficit for 2026 to 50,000 bpd, a significant decrease from the earlier estimate of 700,000 bpd.

Crude oil is currently experiencing renewed selling pressure, as evidenced by a 0.13% increase in open interest, bringing it to 14,151. Support is positioned at Rs 5,273, beneath which prices may seek to test Rs 5,215. Conversely, resistance stands at Rs 5,407, with a breakout above potentially propelling prices towards the Rs 5,483 mark.