Crude oil concluded the trading session with a 4.18% increase, reaching Rs 9,099, as rising tensions in the Middle East heightened apprehensions regarding potential disruptions in energy supply, inflationary pressures, and the overall stability of the global economy. The US military reported the destruction of five Iranian crude tankers following attempted strikes on a US Navy warship. In response, Iran asserted that it had attacked two American vessels and eight oil tankers in the Gulf, issuing warnings to shipping crews operating near Kuwaiti and Bahraini ports.
The escalation has heightened the risks of supply disruptions in the Strait of Hormuz, as Iran-backed Houthi militants have targeted Saudi energy infrastructure, notably the 400,000-barrel-per-day Jazan refinery. Recovering Chinese oil demand is bolstering crude supplies from Africa, Canada, and Latin America, as refiners look for alternative sources in light of disruptions related to Hormuz. US crude inventories experienced a reduction of 4.45 million barrels in the last week of August, representing the first decrease in five weeks and surpassing forecasts that anticipated a draw of 1.1 million barrels.
Cushing inventories saw an uptick of 0.08 million barrels, whereas refinery crude runs experienced an increase of 0.103 million barrels per day. Petrol inventories decreased by 1.173 million barrels, while distillate stocks saw an increase of 0.796 million barrels, representing their first uptick in five weeks. Meanwhile, OPEC has revised its 2026 global oil demand growth forecast downward to 580,000 barrels per day, representing its fourth consecutive reduction. However, it has increased its outlook for demand growth in 2027. The subdued demand forecast may constrain ongoing increases, yet geopolitical uncertainties continue to bolster price levels.
Technically, the market is experiencing new buying activity, as open interest has risen by 16.33% to 19,347, while prices have increased by Rs 365. Crude oil is presently finding support around Rs 8,940, and a persistent breach beneath this threshold may initiate a downturn toward Rs 8,780. On the upside, resistance is positioned at Rs 9,227, and a decisive move above this level could reinforce the trend and propel prices toward Rs 9,354.
