Crude oil declined by 2.57% to close at Rs 5,642, influenced by increasing supply expectations and a reduction in geopolitical tensions. Output at Kazakhstan’s Tengiz field is experiencing a gradual recovery following a January outage, while indications of easing tensions between Iran and Russia have also influenced market sentiment.

In a further indication of a bearish sentiment, the Organisation of the Petroleum Exporting Countries is said to be considering a return to output increases starting in April. Inventory data exerted additional downward pressure on prices. The Energy Information Administration reports that U.S. crude stocks increased by 8.5 million barrels last week, reaching a total of 428.8 million barrels, significantly surpassing forecasts. Gasoline inventories experienced an increase, whereas distillate stocks saw a decrease.

Meanwhile, net U.S. crude imports experienced a significant increase, while refinery utilization declined to 89.4%. On the demand side, the International Energy Agency has made a slight upward adjustment to its 2026 global demand growth forecast, now projecting an increase of 930,000 bpd, while still anticipating a surplus in the market. Chinese imports of discounted Russian crude are poised to reach unprecedented levels in February, indicative of evolving trade dynamics.

From a technical perspective, the market is experiencing long liquidation, as evidenced by a 0.32% decrease in open interest. Immediate support is identified at Rs 5,563, with additional downside potential towards Rs 5,485. Resistance is positioned at Rs 5,769, and an upward movement beyond this threshold may challenge the Rs 5,897 mark.