Crude oil prices experienced a decrease of 0.26%, concluding at Rs 6,551. This decline occurred as market pressures mounted following OPEC+’s decision to increase production targets starting in August, alongside a recovery in exports through the Strait of Hormuz, which alleviated concerns regarding supply disruptions. The producer group sanctioned an extra output increase of 188,000 barrels per day for August, building on previous quota adjustments made in June and July. However, actual production remains below planned levels due to the recent U.S.-Israeli conflict with Iran, which has disrupted tanker traffic through the Strait of Hormuz and limited exports from Saudi Arabia, Kuwait, and Iraq.
In the United States, crude oil inventories experienced a decrease of 3.775 million barrels, bringing the total to 408.3 million barrels. However, this draw fell short of market expectations. Crude inventories at the Cushing delivery hub saw an uptick for the first time in ten weeks, coinciding with an enhancement in refinery utilisation as processing activity gained momentum. Petrol inventories decreased by 2.333 million barrels, suggesting robust fuel demand, while distillate inventories increased by 2.483 million barrels, indicating ample supplies of diesel and heating oil.
Net U.S. crude imports experienced an uptick during the week, contributing to the overall market supply. Despite the announced production increases, OPEC+ output continues to fall short of pre-conflict levels, although exports have seen a gradual recovery as shipping conditions have improved. Investors are closely observing the ongoing developments in the Strait of Hormuz and the geopolitical negotiations, as these factors continue to play a significant role in influencing oil prices.
Crude oil is currently experiencing long liquidation, as evidenced by a 0.07% decrease in open interest. Immediate support is identified at Rs 6,490, with subsequent support at Rs 6,428, whereas resistance is established at Rs 6,618. A sustained move above this level could extend gains toward Rs 6,684.