Crude oil yesterday settled 1.32% lower at Rs 5,166, as oversupply concerns exerted more influence than the geopolitical tensions related to Russian shipments. Despite the ongoing risk of sanctions-related disruptions amid stagnant Russia–Ukraine ceasefire negotiations, the overall forecast for 2026 suggests a trend toward a more relaxed market environment. Several institutions, such as Deutsche Bank and Goldman Sachs, anticipate that global supply growth will exceed demand through the upcoming year.

Deutsche Bank anticipates a surplus of no less than 2 million bpd by 2026, whereas Goldman Sachs points to an impending supply wave that is expected to maintain market surplus conditions. However, Brent prices could surpass $70 should there be a more significant decline in Russian output. OPEC+ has upheld its strategy to elevate December output targets by 137,000 bpd, while opting to halt any additional increases in the first quarter of 2026. The Energy Information Administration in the US has reported a divergence in inventory trends.

Crude stocks previously increased by 6.4 million barrels to 427.6 million; however, the latest week revealed a more substantial-than-anticipated draw of 3.426 million barrels, accompanied by a decline in Cushing stocks as well. Gasoline inventories increased by 2.327 million barrels, whereas distillates exhibited a slight build. US crude output is projected to average a record 13.59 million bpd this year, followed by a modest decline next year, bolstered by unexpectedly robust production figures from August.

The market is experiencing renewed selling pressure, as open interest increased by 7.33% to 17,081, coinciding with a decline in prices of Rs 69. Support is positioned at Rs 5,097, with additional potential decline towards Rs 5,027. Resistance stands at Rs 5,248, and a breakout could propel prices to Rs 5,329.