Crude oil prices experienced a decline of 1.3%, settling at Rs 5,155, as the anticipation of a sustained global supply surplus overshadowed geopolitical risks present in various OPEC+ producing countries. As supply disruptions in Venezuela escalated due to a partial US blockade resulting in well shut-ins, the overall market continued to face pressure from increasing production levels and substantial inventories.

The supply of the five North Sea crude grades that support dated Brent is projected to rise to approximately 575,000 bpd in February, up from 565,000 bpd in January, thereby enhancing near-term supply availability. OPEC+ is anticipated to maintain its current stance on production levels at the forthcoming meeting, in light of increasing indications of oversupply.

Notwithstanding this, US output persists in its upward trajectory, with October production reaching an unprecedented 13.87 million bpd. Output gains were widespread, primarily driven by New Mexico and the Gulf of Mexico. Despite a larger-than-anticipated draw of 1.93 million barrels in US crude inventories for the latest week, total commercial stocks continue to sit well above historical averages, currently at 423 million barrels. The IEA has slightly adjusted its 2026 surplus outlook by increasing demand growth projections and reducing supply growth estimates, whereas OPEC has upheld its forecasts for consistent demand growth in the coming year. However, short-term balances continue to exhibit looseness.

From a technical standpoint, the market is experiencing renewed selling pressure, as evidenced by a 4.6% increase in open interest to 19,084, coupled with a price decline of Rs 68. Crude oil exhibits immediate support at Rs 5,106, with additional downside anticipated around Rs 5,056. Resistance is positioned at Rs 5,224, and a breach of this threshold may pave the way toward Rs 5,292.