Crude oil prices experienced a modest increase, closing up 0.79% at Rs 5,870, as market participants continued to evaluate the suitable geopolitical and supply-side risk premium. Sentiment was cautiously bolstered by remarks from U.S. President Donald Trump, who conveyed an optimistic outlook regarding negotiations with Iran aimed at limiting uranium enrichment.

Nevertheless, tensions continue to be heightened following Iran’s warning that it would target U.S. bases in the Middle East in the event of an attack. On the supply front, Saudi Arabia has reduced prices for its key crude grade sold to Asia, reaching the lowest level since late 2020. This move underscores persistent concerns regarding oversupply; however, the smaller-than-anticipated reduction indicates a degree of underlying confidence in demand.

Fundamentals were further influenced by favorable inventory data and updated projections. U.S. crude inventories experienced a decline of 3.455 million barrels, significantly surpassing expectations, accompanied by notable reductions in both Cushing and distillate stocks. The IEA has adjusted its forecast for global oil demand growth in 2026 upwards, while simultaneously reducing its estimates for supply growth, indicating a marginally tighter surplus. In the interim, the EIA anticipates a decline in U.S. crude production in 2026 and 2027 following its peak in 2025, which will contribute to medium-term support.

From a technical perspective, the market is experiencing new buying activity, as evidenced by a 3.91% increase in open interest to 12,057, coupled with a price gain of Rs 46. Crude oil is currently supported at Rs 5,737; a decline beneath this level may lead to a test of Rs 5,604. Resistance is identified at Rs 5,948, and surpassing this threshold could pave the way toward Rs 6,026.