Crude oil prices declined by 3.28% to Rs 9,253, as sentiment was influenced by optimism regarding a potential de-escalation in the Middle East. Donald Trump indicated that U.S. forces might exit Iran in a matter of weeks, fostering optimism that the conflict could be resolved swiftly. Nevertheless, the circumstances continue to be ambiguous, as ongoing military operations and new assaults on energy infrastructure, such as drone strikes in proximity to Kuwait, maintain a state of tension in the markets.

On the supply side, inventory data exerted additional pressure. U.S. crude inventories experienced a notable increase, climbing by more than 10 million barrels in the most recent week, significantly surpassing forecasts. Prior data has similarly indicated steady increases in inventory, suggesting a robust supply.

Concurrently, the global production dynamics exhibit a mixed pattern. According to OPEC data, Libya’s Sharara oilfield is anticipated to return to normal output levels shortly, whereas there has been a slight decrease in Russian production. Kazakhstan, conversely, indicated a rebound in production levels. Despite bearish inventory trends, underlying risks remain, as policymakers caution about potential price spikes should the conflict escalate once more.

The market is currently experiencing significant long liquidation, as evidenced by a 22.06% decline in open interest, bringing it down to 11,885 lots. Immediate support is identified at Rs 8,906, with additional downside potential toward Rs 8,560. On the upside, resistance is positioned at Rs 9,721, and a breach of this level may propel prices toward Rs 10,190.