Crude oil prices concluded the session with a slight decline of 0.12% at Rs 9711, as market participants weighed the implications of tightening supply conditions against the backdrop of diminishing expectations for global demand. Market sentiment exhibited volatility following OPEC’s downward revision of its forecast for global oil demand growth in 2026. This adjustment aligns with the International Energy Agency’s similar move to lower projections, attributed to the economic and logistical ramifications stemming from the ongoing conflict in Iran. OPEC has revised its forecast for global oil demand, now anticipating an increase of 1.17 million barrels per day in 2026, a decrease from the previous estimate of 1.38 million bpd.

Conversely, the demand growth projection for 2027 has been adjusted upward to 1.54 million bpd, indicating expectations of a more robust recovery as geopolitical tensions subside. In light of diminished demand projections, apprehensions regarding supply persist in bolstering crude prices. The International Energy Agency has issued a cautionary note regarding the potential inadequacy of global oil supply to satisfy total demand this year, as disruptions associated with the Middle East conflict escalate.

The agency has projected that over 14 million barrels per day of production are currently offline as a result of limited tanker movement through the Strait of Hormuz, resulting in one of the most significant supply disruptions in recent times. In April, Russian crude production experienced a decline of 460,000 barrels per day relative to the previous year, primarily attributed to the escalation of Ukrainian drone strikes targeting energy infrastructure. Additional backing was provided by optimistic US inventory data. US crude stocks experienced a decline of 4.306 million barrels last week, bringing the total to 452.9 million barrels, a figure that notably exceeds market expectations.

Gasoline inventories experienced a significant decline of 4.084 million barrels, suggesting robust fuel demand, alongside a modest improvement in refinery utilization. From a technical perspective, the market is experiencing long liquidation, evidenced by a 20.61% decrease in open interest, which has settled at 9273, alongside a price decline of Rs 12. Crude oil is currently finding support at Rs 9565, with additional downside support positioned at Rs 9419. On the upside, resistance is anticipated at Rs 9906, and a breach of this level may propel prices toward Rs 10101.