Crude oil yesterday concluded the trading session with an increase of 0.62% at Rs 5,328, reflecting renewed optimism surrounding a potential agreement to reopen the U.S. government, which is anticipated to enhance fuel demand. The positive sentiment was somewhat mitigated by ongoing apprehensions regarding global oversupply, following U.S. President Donald Trump’s decision to grant Hungary a one-year exemption from sanctions on Russian oil and gas purchases.

In a significant development affecting market dynamics, Russian oil major Lukoil has declared force majeure at Iraq’s West Qurna-2 oilfield due to sanctions imposed by the U.S. and U.K., leading to disruptions in operations and payments. Despite these developments, global supply concerns persisted as U.S. crude production rose by 86,000 barrels per day to a record 13.8 million bpd in August, according to data, indicating strong output even as inventories continued to accumulate.

U.S. crude inventories experienced a significant increase of 5.202 million barrels in the week ending October 31, surpassing market expectations. In contrast, gasoline and distillate stocks declined by 4.73 million and 0.643 million barrels, respectively, indicating divergent demand trends in refined products. In October, China’s crude imports experienced an increase of 8.2% year-on-year, reaching 48.36 million metric tons, equivalent to 11.4 million barrels per day. This uptick indicates robust refinery operations and sustained resilience in imports, with cumulative imports for the first ten months showing a 3.1% rise compared to the previous year.

From a technical perspective, the market is experiencing short covering, evidenced by a 7.46% decline in open interest to 10,538, alongside a price increase of Rs 33. Crude oil demonstrates support at Rs 5,272 and Rs 5,216, whereas resistance is identified at Rs 5,377 and Rs 5,426. A breakout above these thresholds is anticipated to further amplify the bullish momentum.