Crude oil concluded the trading session with a 2.45% increase, reaching Rs 8,063, as market participants evaluated the intensifying geopolitical tensions related to the US-Iran conflict and the potential for supply interruptions. Renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz have intensified concerns regarding transportation and regional supply security. Meanwhile, the stalled negotiations between Washington and Tehran have diminished expectations for a swift diplomatic resolution. Shipping activity through the Strait of Hormuz experienced a significant decline, with merely five commodity vessels transiting on Saturday and none on Sunday, in stark contrast to the 31 vessels recorded during the preceding weekend.

However, the lack of significant physical supply disruptions constrained additional upward movement. OPEC has revised its 2026 global oil demand growth forecast down to 580,000 barrels per day, representing the fourth consecutive downward adjustment. Meanwhile, the International Energy Agency anticipates a contraction in global consumption by 1.6 million barrels per day, attributed to limited fuel supplies and elevated prices associated with the ongoing conflict. US crude inventories saw a significant rise of 17.4 million barrels, reaching 424.4 million barrels for the week ending August 7. This contrasts sharply with the anticipated draw of 1.4 million barrels, while Cushing stocks also experienced an increase of 1.6 million barrels.

Refinery crude runs saw an uptick of 26,000 barrels per day, despite a slight decrease in utilisation of 0.3 percentage points. Petrol inventories decreased by 1 million barrels, bringing the total to 208.7 million barrels, whereas distillate stocks experienced a slight reduction, now standing at 107.1 million barrels. Net US crude imports rose by 1.77 million barrels per day, underscoring the bearish influence of increasing crude inventories. Despite weakening demand projections and elevated inventories, geopolitical risk continues to serve as the principal bullish catalyst for prices.

Crude oil is experiencing renewed buying interest, evidenced by a significant increase in open interest, which rose by 85.28% to reach 11,113 contracts, alongside a price increase of Rs 193. The market is currently underpinned at Rs 7,870, with a breach beneath this threshold likely to expose further downside toward Rs 7,677. On the upside, resistance is positioned at Rs 8,185, and a sustained movement above this threshold could propel prices toward Rs 8,307.