Crude oil settled 0.99% higher at Rs 8,143 as the likelihood of a renewed agreement between the United States and Iran diminished following President Donald Trump’s indication of disinterest in extending the interim peace arrangement, which officially expired on Monday. The development heightened uncertainty regarding future oil flows, especially through the strategically significant Strait of Hormuz. Iran and Oman have maintained dialogues regarding the management of shipping in the waterway, whereas the United States is expected to oppose any agreement that fails to guarantee unrestricted passage. Middle Eastern producers are increasingly employing alternative and covert routes to transport crude through and around Hormuz, thereby sustaining global supplies in the face of geopolitical risks.

Speculative sentiment showed signs of improvement, as CFTC WTI crude oil net long positions increased by 4,034 contracts, reaching a total of 105,860 contracts for the week ending August 11. However, demand expectations continue to face significant pressure. OPEC has revised its 2026 global oil demand growth forecast down to 580,000 barrels per day, representing the fourth consecutive downward adjustment. In contrast, the International Energy Agency anticipates a contraction in consumption by 1.6 million barrels per day, attributing this decline to constrained fuel supplies and elevated prices associated with the U.S.-Israeli conflict involving Iran.

U.S. inventory data exerted additional pressure on fundamentals, with crude stocks rising by 17.4 million barrels to reach 424.4 million barrels in the week ending August 7, significantly surpassing expectations for a 1.4 million-barrel draw. Cushing inventories rose by 1.6 million barrels, whereas petrol stocks fell by 1 million barrels, bringing the total to 208.7 million barrels. Additionally, distillate inventories decreased by 10,000 barrels, resulting in a total of 107.1 million barrels. Refinery crude runs saw an uptick of 26,000 barrels per day, despite a slight decline in utilisation of 0.3 percentage points.

Concurrently, net crude imports experienced a significant increase of 1.77 million barrels per day. Crude oil is currently experiencing short covering, as evidenced by a significant decline in open interest, which has dropped by 49.54% to 5,608 contracts, while prices have increased by Rs 80. Immediate support is positioned at Rs 8,078, beneath which prices may test Rs 8,012. Resistance is identified at Rs 8,218; a sustained movement above this threshold could pave the way toward Rs 8,292.