Crude oil prices experienced an increase of 2.47%, closing at Rs 9924, as ongoing uncertainty regarding U.S.-Iran negotiations continued to raise concerns about potential disruptions in the Strait of Hormuz, a vital global energy shipping corridor. Market sentiment shifted to a bullish stance as optimism surrounding a swift agreement diminished, heightening concerns that restrictions on energy flows through the strait may continue. Further backing was provided following the remarks of U.S. Energy Secretary Chris Wright, who indicated that for every barrel drawn from the Strategic Petroleum Reserve, a minimum of 1.2 barrels would be restored, reflecting a sustained dedication to the replenishment of emergency reserves.

Geopolitical developments continued to attract attention following the agreement between U.S. President Donald Trump and Chinese President Xi Jinping on the necessity of keeping the Strait of Hormuz open for the uninterrupted flow of energy resources. Iraq underscored the significance of the region, noting exports of 10 million barrels via the strait in April. Iraq’s oil minister announced that the nation intends to collaborate with OPEC to enhance production and export capabilities, aiming for an output capacity of 5 million barrels per day. Fundamentally, U.S. inventory data offered further backing to prices. U.S. crude oil inventories decreased by 4.306 million barrels, bringing the total to 452.9 million barrels, a figure that notably surpassed the anticipated decline of 2.1 million barrels.

Stocks at the Cushing hub experienced a decrease of 1.702 million barrels, whereas gasoline inventories saw a significant decline of 4.084 million barrels, indicating robust fuel demand. Refinery runs experienced an uptick of 370,000 barrels per day, accompanied by a 0.5 percentage point increase in utilization rates. OPEC has revised its 2026 global oil demand growth forecast downward to 1.17 million barrels per day, a decrease from the prior estimate of 1.38 million bpd, attributing this adjustment to the influence of the Iran conflict on worldwide consumption patterns. Nonetheless, the group has revised its 2027 demand growth forecast upward to 1.54 million bpd.

From a technical perspective, the market is experiencing renewed buying activity, evidenced by a 53.27% increase in open interest to 15,318, alongside a price increase of Rs 239. Crude oil is currently finding support at Rs 9620; should prices fall below this level, they may approach the Rs 9317 mark. Resistance is identified at Rs 10112, with a breach of this level potentially driving prices towards Rs 10301.