Crude oil prices increased by 0.75% to Rs 5,360, buoyed by a resurgence in demand expectations after the conclusion of the U.S. government shutdown, which enhanced sentiment regarding short-term energy consumption. Supply-side risks experienced a temporary escalation following a Ukrainian strike that interrupted activities at Russia’s Novorossiysk port; however, loading operations have since returned to normal.

Simultaneously, U.S. sanctions on Rosneft and Lukoil are exerting pressure on Russia’s oil revenues, while Washington has indicated a willingness to expand sanctions to nations engaging in trade with Moscow—and possibly Iran—thereby introducing additional geopolitical uncertainty. Goldman Sachs anticipates a downward trajectory for oil prices through 2026, driven by a sustained supply surplus. However, they acknowledge the possibility of Brent prices exceeding $70 in 2026/27 should there be a more significant decline in Russian output.

OPEC+ has upheld its strategy to boost December production by 137,000 bpd, while indicating a potential halt in increases during the first quarter of the upcoming year. The most recent EIA data indicated a significant increase in U.S. crude stocks, which rose by 6.4 million barrels to reach 427.6 million, marking the largest build since July. In contrast, gasoline and distillate inventories experienced slight reductions. U.S. oil production is projected to average 13.59 million bpd this year, setting a new record, with only a modest decline anticipated for the following year.

Crude oil is currently experiencing new buying activity, as evidenced by a 2.96% increase in open interest to 3,549, alongside a price gain of Rs 40. Support is positioned at Rs 5,286; a breach may challenge Rs 5,211. Resistance is established at Rs 5,413, and a breach of this level could propel prices toward Rs 5,465.