Crude oil prices experienced a decline of 4.2%, closing at Rs 8,836. This movement reflects investor sentiment leaning toward the potential for enhanced shipment prospects from Saudi Arabia, even in the face of persistent attacks by Yemeni Houthis and the prevailing uncertainty related to the US-Iran standoff. President Donald Trump suggested a potential willingness to meet Iranian President Masoud Pezeshkian during the United Nations General Assembly, as diplomatic initiatives involving Gulf states and interactions between the US and Iran fostered optimism for reducing regional tensions. US Central Command reported that oil and LNG shipments through the Strait of Hormuz have reached their highest level in six months over the past two weeks, alleviating immediate concerns regarding supply disruptions.

Iraq exported 4 million barrels in a single day in September, successfully bypassing the Strait of Hormuz. The average exports for September were recorded at 2.6 million barrels per day. Money managers decreased their net long positions in US crude futures and options by 531 contracts, bringing the total to 139,515 for the week ending September 15. This shift suggests a decline in speculative positioning. US crude inventories fell by 640,000 barrels to 423.4 million barrels, a decrease that was less than the market’s anticipated draw of 1.6 million barrels.

Cushing stocks decreased by 342,000 barrels, whereas refinery crude runs saw a reduction of 256,000 barrels per day, leading to a slight decline in utilisation to 96.8%. Petrol inventories rose by 794,000 barrels, reaching a total of 207.7 million barrels, whereas distillate stocks increased by 1.6 million barrels to 107.9 million barrels, indicating a divergence in domestic demand trends. OPEC has revised its 2026 global oil demand growth forecast downward to 380,000 barrels per day, representing the fifth consecutive reduction. Meanwhile, the IEA has cautioned that diminishing inventories and limited refining capacity may lead to market tightness if disruptions in the Middle East continue.

From a technical perspective, the market is experiencing long liquidation, evidenced by a 9.41% decrease in open interest to 12,734, alongside a price decline of Rs 387. Crude oil is currently encountering support at Rs 8,694. A sustained breach beneath this threshold may reveal a potential decline toward Rs 8,551. On the upside, resistance is positioned at Rs 9,039, and a decisive move above this threshold could result in a test of Rs 9,241.