Crude oil prices exhibited an upward trajectory, concluding with an increase of 2.42% at Rs 5,163, as market participants evaluated recent developments concerning Venezuela and the ongoing deliberations regarding potential U.S. sanctions on nations engaging in commerce with Russia. The recent release of softer U.S. labor data has bolstered market sentiment, thereby reinforcing expectations for a more accommodative stance from the Federal Reserve and enhancing prospects for demand.

Nevertheless, the increases were constrained by escalating inventories at Cushing and significant accumulations in gasoline and distillate stocks, underscoring persistent oversupply apprehensions in refined products. In December, OPEC’s crude production exhibited relative stability, maintaining a level just above 29 million barrels per day. A notable decrease in Venezuelan output to a two-year low of approximately 830,000 bpd—attributable to U.S. measures against tankers—was counterbalanced by increased production from Iraq and several other member countries.

U.S. inventory data indicated a significant reduction of 1.93 million barrels in crude stocks for the week ending December 26, marking the largest decrease since mid-November. Nevertheless, total commercial stocks continue to remain well above historical averages at 423 million barrels. Conversely, there was a significant increase in gasoline and distillate inventories, highlighting a lack of robust downstream demand.

From a technical perspective, the market is experiencing short covering, evidenced by a significant decline in open interest of 20.27% alongside a price increase of Rs 122. Crude oil exhibits support at Rs 5,087, with potential further decline towards Rs 5,012. Resistance is identified at Rs 5,205, with a potential advance above this level possibly testing Rs 5,248.