Crude oil prices experienced a significant correction, declining by 7.37% to close at Rs 8,571, as the alleviation of geopolitical tensions exerted downward pressure on the market. Reports indicating that the U.S. and Iran are amenable to additional discussions regarding a more extended ceasefire have contributed to a reduction in the risk premium, despite prior disturbances stemming from the blockade of the Strait of Hormuz. Nonetheless, supply dynamics continue to exhibit tightness.

OPEC data revealed a notable decline in Saudi Arabia’s oil supply, which fell to 7.76 million barrels per day in March, marking the lowest level since mid-2020. This trend was mirrored by similar reductions in Iraq, Kuwait, and the UAE, attributed to export disruptions. The current six-week closure of the Strait of Hormuz has compelled producers to reduce output, thereby constraining global supply. In line with this, UBS has adjusted its forecasts for Brent prices, anticipating that crude will reach $100 per barrel by June 2026.

On the inventory front, U.S. crude stocks increased by 3.1 million barrels, whereas gasoline and distillate inventories experienced a decline, suggesting mixed signals regarding demand. OPEC has revised its global demand forecast for the second quarter downward by 500,000 bpd, attributing this adjustment to temporary weaknesses associated with events in the Middle East. However, a recovery in demand is anticipated in the latter half of the year.

The market is currently experiencing long liquidation, evidenced by a 2.87% decline in open interest, which now stands at 8,057. Immediate support is identified at Rs 8,356, with potential downside extending to Rs 8,141. Resistance is positioned at Rs 8,960, and a breach above this level could propel prices toward Rs 9,349.