Crude oil prices experienced a slight decline, closing down 0.32% at Rs 5,335, as the anticipation of a revival in Venezuelan oil exports overshadowed the premiums associated with geopolitical risks. Market participants concentrated on signals suggesting that Venezuela might soon make available up to 50 million barrels of previously sanctioned crude, thereby contributing to short-term supply dynamics. This occurred notwithstanding the intensifying protests in Iran, where the unrest has heightened apprehensions regarding possible disruptions in the Strait of Hormuz.

Iran’s export levels approach 2 million barrels per day, positioning it as OPEC’s fourth-largest producer, thereby presenting a significant upside risk for prices. Further uncertainty arises from potential supply disruptions originating from Russia, in light of ongoing assaults on energy infrastructure and the likelihood of more stringent U.S. sanctions. In the latest data release, U.S. crude inventories experienced a significant decline of 1.93 million barrels, surpassing expectations considerably.

Nonetheless, the overall supply landscape appears adequate, with commercial crude inventories at year-end reaching 423 million barrels, surpassing historical norms. Refined products exhibited pronounced oversupply pressures, with gasoline inventories increasing by 5.85 million barrels and distillates climbing nearly 5 million barrels. The IEA has made a modest adjustment to its forecast for the global surplus in 2026, as OPEC+ production increased in November, thereby intensifying supply-side pressures.

From a technical standpoint, the market is experiencing long liquidation, evidenced by a 6.24% decline in open interest as prices have decreased. Crude oil exhibits a support level at Rs 5,286; a decline beneath this threshold may lead prices to approach Rs 5,237. Resistance is identified at Rs 5,374, with a breach of this threshold potentially paving the path toward Rs 5,413.