Crude oil prices concluded the trading session down by 0.95% at Rs 8,037, as diplomatic discussions between Oman and Iran concerning the Strait of Hormuz alleviated immediate worries about supply disruptions, even amidst the persistent geopolitical tensions between the United States and Iran. Profit booking also emerged following recent gains, although the downside remained constrained by a significant drop in U.S. crude inventories. According to the U.S. Energy Information Administration, commercial crude oil inventories decreased by 7.2 million barrels to 404.5 million barrels in the week ending July 24. This decline notably surpassed market expectations of a 1.3 million-barrel draw and represents the lowest inventory level since 2018.

Crude stocks at the Cushing, Oklahoma delivery hub decreased by 771,000 barrels to 18.6 million barrels, marking the lowest level since 2014. Concurrently, refinery utilisation rose to 97.2%, indicating strong refining activity. Supply-side developments exhibited a varied landscape. OPEC+ is anticipated to halt any additional production increases for a period of three months starting in October, following the completion of its planned output restoration. However, the group has already sanctioned an additional increase of 188,000 barrels per day from August, following analogous quota adjustments in June and July.

Meanwhile, Kazakhstan’s key Black Sea export terminal suspended tanker loadings after Ukrainian drone attacks, while security risks in the Red Sea persisted as tankers carrying Saudi crude altered shipping routes following Houthi threats. In the United States, petrol inventories saw a slight increase of 7,000 barrels, while distillate stocks rose by 1.1 million barrels. This suggests that fuel supplies remain sufficient, even in the face of robust refinery demand.

Technically, the market experienced new selling pressure, as open interest increased by 2.63% to 9,246 contracts while prices fell, indicating the formation of new short positions. Crude oil is maintaining immediate support at Rs 7,902; a breach of this level is expected to lead to further declines towards Rs 7,768. On the upside, resistance is observed at Rs 8,207, and a sustained movement above this level could initiate additional gains towards Rs 8,378, contingent upon geopolitical developments and inventory trends.