Crude oil declined by 2.05% to settle at Rs 9,665, influenced by a reduction in geopolitical risk sentiment as optimism surrounding a potential U.S.–Iran ceasefire increased. Market participants responded to signs of renewed diplomatic engagement, which may ultimately lead to the stabilization of supply disruptions. Nonetheless, fundamental apprehensions regarding a wider energy crisis remain, as emphasized by the International Energy Agency, which points to continued pressure within global oil and gas markets.

Fundamentally, supply dynamics continue to exhibit tightness despite the recent price correction. U.S. crude production increased to 13.63 million barrels per day in February, reaching a multi-month peak, while exports soared to a historic 6.438 million bpd, propelled by diminished flows from the Middle East due to tensions surrounding the Strait of Hormuz. Meanwhile, U.S. crude inventories experienced a notable decline of 6.23 million barrels, surpassing expectations, coupled with significant reductions in gasoline and distillate stocks, suggesting strong demand and enhanced refinery operations.

OPEC has adjusted its global oil demand forecast for the second quarter of 2026, lowering it by 500,000 barrels per day to 105.07 million barrels per day. This revision is attributed to a temporary weakness associated with geopolitical uncertainties. Nevertheless, the group upheld its full-year demand growth forecast, anticipating a recovery in the latter half of the year as market conditions normalize.

From a technical perspective, the market is experiencing long liquidation, as evidenced by a 6.26% decrease in open interest to 15,344 contracts, coupled with a price decline of Rs 202. Immediate support is identified at Rs 9,374, with additional downside potential extending toward Rs 9,082. On the upside, resistance is positioned at Rs 10,013, and a sustained movement above this threshold could initiate a recovery toward Rs 10,360.