Crude oil prices experienced a notable increase of 3.19%, concluding at Rs 8,410. This surge was propelled by rising geopolitical tensions in the Middle East, which heightened apprehensions regarding possible interruptions to global oil supplies. Ongoing military operations by the United States against Iran, coupled with escalating threats to maritime shipping in the Red Sea from Iran-aligned Houthi forces, have intensified concerns regarding the security of vital energy trade routes. The potential for extended disruptions in the Strait of Hormuz, a crucial global oil transit route, persisted in bolstering optimistic market sentiment, even in the face of indications of enhanced supply in other regions.

Fundamentally, the most recent U.S. inventory data revealed a nuanced landscape. The American Petroleum Institute reported an increase in crude and distillate inventories, while petrol stockpiles declined. Official data indicated that U.S. crude inventories rose by 2.011 million barrels, contrary to expectations of a draw, while petrol and distillate stocks also experienced increases. Net U.S. crude imports increased by 485,000 barrels per day, despite a decrease in inventories at the Cushing delivery hub.

The International Energy Agency observed that approximately 290 million barrels of strategic oil have been released by member countries since March in an effort to stabilise markets. Meanwhile, the U.S. Strategic Petroleum Reserve has decreased to 311.4 million barrels, marking its lowest level since 1983. Goldman Sachs cautioned that Brent crude prices might surpass $120 per barrel should disruptions persist in the Strait of Hormuz. On the supply side, OPEC+ has sanctioned an additional production target increase of 188,000 barrels per day starting in August.

However, actual output continues to fall short of pre-conflict levels, attributable to regional disruptions. Crude oil experienced a phase of short covering, evidenced by a 3.13% decrease in open interest, while prices surged significantly. Immediate support is identified at Rs 8,229, with subsequent support at Rs 8,048, while resistance is established at Rs 8,584. A sustained move above this level could extend gains towards Rs 8,758.