Crude oil prices experienced a decline of 4.45%, settling at Rs 7,603, attributed to the easing of geopolitical tensions in the Middle East, which alleviated concerns regarding potential supply disruptions. Sentiment diminished following U.S. President Donald Trump’s remarks indicating that Washington was involved in constructive discussions with Iran, which had initially raised expectations for a diplomatic resolution and the reinstatement of regular oil flows through the Strait of Hormuz. The suspension of U.S. military strikes, coupled with renewed negotiations between Iranian and Omani officials, has bolstered confidence that one of the world’s most vital energy shipping routes may continue to operate without disruption.

Additional supply support emerged from the resumption of crude exports via the Caspian Pipeline Consortium terminal located on Russia’s Black Sea coast, following previous disruptions. Fundamental data also exerted pressure on prices. U.S. crude oil inventories rose by 2.011 million barrels, defying forecasts of a 1.25 million-barrel decline, indicating weaker demand dynamics. Petrol inventories increased by 765 thousand barrels, and distillate stocks saw a rise of 1.395 million barrels, both suggesting a surplus in fuel supplies. Net U.S. crude imports increased by 485 thousand barrels per day, contributing to the availability of supply.

On the production front, OPEC+ has sanctioned an additional output increase of 188,000 barrels per day starting in August, thereby extending prior production hikes. Despite actual production still lagging behind pre-conflict levels due to prior disruptions in the Strait of Hormuz, the steady recovery in exports and elevated production targets persist in bolstering expectations for an enhanced global oil supply.

From a technical perspective, crude oil is currently experiencing long liquidation, as evidenced by a 30.87% decline in open interest alongside decreasing prices, which suggests the liquidation of bullish positions. Immediate support is identified at Rs 7,406, with subsequent support at Rs 7,208. Resistance levels are positioned at Rs 7,860 and Rs 8,116. Sustained trading below support may prolong the corrective phase, while a breakout above resistance could stimulate new buying momentum.