Crude Oil prices increased by 2.30%, closing at Rs 6,728, as renewed military exchanges between the US and Iran underscored the tenuous nature of their interim peace agreement, thereby maintaining a heightened geopolitical risk premium. However, gains were capped after both countries agreed to resume negotiations over the Strait of Hormuz, raising hopes of preserving the ceasefire and ensuring smoother energy shipments through the strategic waterway. In a development that bolsters supply optimism, Saudi Aramco has recommenced crude loadings at its Ras Tanura export terminal following an extended suspension, thereby reinforcing expectations for an uptick in regional oil exports.

Meanwhile, US refining capacity experienced a reduction of 263,000 barrels per day in 2025, attributable to refinery conversions and plant closures, indicative of persistent structural shifts within the refining sector. CFTC data indicated that money managers decreased their net long positions in US crude futures and options, reflecting a more cautious market outlook. Fundamental data continued to show strength following the report from the US Energy Information Administration, which indicated a decline of 6.088 million barrels in crude oil inventories, surpassing market expectations of a 4.5 million-barrel draw.

Crude stocks at the Cushing delivery hub have experienced a notable decline, indicating a reduction in crude availability. However, petrol and distillate inventories recorded larger-than-anticipated increases, while refinery throughput experienced a slight decline and net crude imports increased modestly. In May, OPEC production experienced a significant decline, reaching its lowest level in over twenty years. This reduction can be attributed to a combination of sanctions, shipping disruptions, and export losses due to conflict, which have severely impacted Iranian and Gulf producers’ exports, thereby counteracting the intended production increases by OPEC+.

Crude Oil is currently experiencing short covering, evidenced by a 5.26% decline in open interest alongside an increase in prices. Immediate support is positioned at Rs 6,621, with additional downside anticipated around Rs 6,513 should this level be violated. On the upside, resistance is positioned at Rs 6,792, and a sustained movement above this threshold could potentially extend gains towards Rs 6,855.