Crude oil prices experienced a modest increase, closing up by 0.34% at Rs 5,272, primarily driven by rising geopolitical tensions. Markets gained momentum from ongoing US initiatives to intercept oil tankers in proximity to Venezuela, as Washington escalates its pressure on President Nicolás Maduro’s government. While Venezuelan crude constitutes a modest portion of the global supply, any disruption poses a significant threat to a crucial revenue source for the nation and contributes to elevated risk premiums. Additional backing was provided by the resurgence of hostilities between Ukraine and Russia, with strikes aimed at Black Sea port infrastructure and adjacent vessels, heightening apprehensions regarding the security of vital pathways for Russian energy exports.

Nonetheless, the increases were constrained by divergent inventory indicators and a general perspective of oversupply. API data revealed a 2.4 million barrel increase in US crude inventories for the previous week, accompanied by rises in gasoline and distillate stocks. Official data indicated a decline in US crude stocks by 1.274 million barrels, accompanied by significant draws at Cushing, Oklahoma.

However, substantial increases in gasoline and distillates underscored a lack of robust end-user demand. Oil is poised to register an annual loss surpassing 18%, with projections indicating that supply will likely exceed demand in the forthcoming year. On the macroeconomic front, the IEA has slightly adjusted its forecast for the 2026 surplus to 3.84 million bpd, reflecting an upward revision in demand growth alongside a reduction in supply growth.

From a technical perspective, the market is experiencing short covering, as evidenced by a slight decrease in open interest of 0.05% to 18,698, accompanied by a price increase of Rs 18. Support is identified at Rs 5,249, with the potential for a test of 5,226 should it be breached. Resistance is positioned at Rs 5,299, and a breakout may propel prices toward Rs 5,326.