Crude oil prices increased by 0.95%, closing at Rs 8,113, as renewed geopolitical tensions in the Middle East intensified worries regarding global supply security. Market sentiment improved following reports that Iran’s Revolutionary Guards halted two tankers from passing through the Strait of Hormuz, leading several other vessels to change their routes. This development prompted traders to reevaluate shipping risks in one of the globe’s most vital oil transit corridors. Despite ongoing discussions between Iran and Oman regarding the management of the Strait, the prevailing uncertainty surrounding maritime security, coupled with recent drone attacks near Russia’s Novorossiysk export terminal, has contributed to upward pressure on prices.

Furthermore, reports indicating that Saudi crude tankers bound for India navigated the Red Sea without broadcasting their location signals underscored heightened regional risks. Fundamentally, the U.S. Energy Information Administration reported a sharp 7.2 million-barrel decline in crude inventories to 404.5 million barrels, significantly exceeding expectations for a 1.3 million-barrel draw and marking the lowest stock level since 2018. Crude inventories at the Cushing delivery hub experienced a reduction of 771,000 barrels, bringing the total to 18.6 million barrels, marking the lowest level since 2014.

Refinery utilisation rose to 97.2%, indicative of robust refinery operations, while petrol inventories saw a slight increase of 7,000 barrels and distillate stocks experienced a rise of 1.1 million barrels. Meanwhile, OPEC+ is anticipated to halt production increases for three months starting in October, following the completion of its planned output restoration, despite having previously sanctioned an additional increase of 188,000 barrels per day from August. Current production growth continues to be limited by persistent regional disruptions and logistical hurdles.

From a technical perspective, crude oil experienced short covering, as open interest decreased by 6.37% to 8,657 contracts while prices increased. Immediate support is positioned at Rs 7,826, with a breach beneath this threshold likely to incite additional weakness toward Rs 7,539. On the upside, resistance is observed at Rs 8,333, and a sustained movement above this threshold could potentially extend gains toward Rs 8,553.