Crude oil yesterday concluded the trading session with an increase of 0.46% at Rs 5,447, following OPEC+’s decision to halt production increases for the first quarter of 2026, which offered a degree of support to prices. The coalition, which includes OPEC and its partners such as Russia, has reached a consensus to increase output by 137,000 barrels per day in December, subsequently opting to sustain existing production levels until the first quarter of 2026 to achieve equilibrium between supply and demand.

OPEC Secretary-General Haitham Al Ghais emphasized that the forecast for oil demand continues to be optimistic, with no significant market disruptions anticipated. Morgan Stanley has adjusted its Brent crude forecast for the first half of 2026, increasing it to $60 per barrel from the previous estimate of $57.5. This revision is attributed to the ongoing production pause and the recent sanctions imposed on Russian oil assets. The Energy Information Administration reported a significant decline in crude inventories in the United States, with a reduction of 6.858 million barrels for the week ending October 24, markedly exceeding expectations of a 0.4-million draw.

Gasoline and distillate inventories decreased by 5.941 million and 3.362 million barrels, respectively, indicating robust demand. Meanwhile, U.S. crude output increased to a historic 13.8 million bpd in August. OPEC has upheld its forecast for oil demand growth in 2025 and 2026, anticipating a reduced supply deficit as production steadily rises.

From a technical perspective, the market experienced short covering, as evidenced by a 4.76% decline in open interest to 14,160, accompanied by a price increase of Rs 25. Crude oil is currently encountering support at Rs 5,398; a decline below this level may lead to a test of Rs 5,350. Conversely, resistance is identified at Rs 5,482, with a potential breakout above this threshold possibly driving prices towards Rs 5,518.