Crude oil yesterday settled higher by 0.82% at Rs 5427, reflecting the persistent geopolitical tensions, particularly the ongoing Russia-Ukraine conflict and the unresolved standoff between the U.S. and Venezuela. Market sentiment was shaped by Saudi Arabia’s decision to lower its January Arab Light crude prices for Asia to the lowest point in five years, alongside a significant decline in Canadian crude prices. Markets maintained a vigilant stance following President Donald Trump’s suggestion of impending measures against Venezuela, a development that could jeopardize the nation’s 1.1 million bpd production levels.

Further backing was provided by the stagnation of U.S. diplomatic initiatives in Moscow alongside ongoing Ukrainian offensives targeting Russian energy infrastructure. Fundamentals indicated a varied global perspective. Fitch Ratings has revised downward its oil price projections for 2025-2027 due to concerns regarding oversupply. Meanwhile, OPEC+ has opted to maintain its output levels for the first quarter of 2026, indicating a cautious approach in light of a potential supply glut.

The group additionally sanctioned a framework to evaluate the maximum capacity of members for establishing a baseline beyond 2027. In the meantime, U.S. production reached a historic high of 13.84 million bpd in September, driven by significant increases in New Mexico and the Gulf of Mexico. Inventories experienced a modest increase of 0.574 million barrels last week, whereas gasoline stocks surged significantly by 4.52 million barrels.

From a technical perspective, the market is experiencing new buying activity, evidenced by a 3.06% increase in open interest to 13,607, alongside a price increase of 44 points. Crude oil encounters immediate support at Rs 5367, with additional downside risk extending toward Rs 5306. Resistance is established at Rs 5469, and a breakout above this threshold could pave the way toward Rs 5510.