Crude oil prices concluded the trading session with an increase of 2.11%, reaching Rs 8,825, as market participants evaluated the initiatives aimed at reinstating interrupted supplies from the Middle East, all while grappling with ongoing geopolitical uncertainties. Saudi Arabia is poised to resume exports via its essential East-West pipeline, which may circumvent the Strait of Hormuz and facilitate increased shipments. Meanwhile, US President Donald Trump remarked that American officials engaged in a “very productive” meeting with Iranian envoys, with additional discussions on the agenda, although uncertainty regarding regional tensions continues to be high.

The American Petroleum Institute reported a 1.8-million-barrel increase in US crude inventories, while petrol and distillate stocks experienced a decline. EIA data subsequently indicated an increase in US crude inventories by 3 million barrels, reaching 426.4 million barrels for the week ending September 18, contrary to expectations of a 641,000-barrel draw. Cushing crude stocks rose by 2.3 million barrels, reaching a total of 23.7 million barrels. In contrast, refinery runs decreased by 519,000 barrels per day, and refinery utilisation dropped by 2.8 percentage points to 94%. Petrol inventories decreased by 1.7 million barrels, bringing the total to 206 million barrels, whereas distillate stocks experienced a reduction of 0.4 million barrels, resulting in a total of 107.4 million barrels.

The US Strategic Petroleum Reserve has decreased to 284.6 million barrels, marking its lowest level since October 1982. Libya has reported a decline in production of approximately 130,000 barrels per day following the shutdown of the Sharara-Zawiya pipeline. Bank of America has adjusted its second-half 2026 Brent forecast upward to $95 per barrel from a previous estimate of $83, attributing this change to ongoing geopolitical tensions. The firm continues to project an average price of approximately $80 for 2027. OPEC has revised its 2026 global oil demand growth forecast down to 380,000 barrels per day, representing the fifth consecutive downward adjustment.

Meanwhile, the IEA has cautioned that diminishing inventories and limited refining capacity could lead to tighter markets if disruptions in the Middle East continue into 2027. Technically, the market is experiencing short covering, as evidenced by a 2.66% decline in open interest to 12,015, alongside a price increase of Rs 182. Crude oil currently exhibits support at Rs 8,576, with a potential breach below this level possibly revealing Rs 8,327. Resistance is positioned at Rs 8,994, and a sustained movement above this threshold may propel prices toward Rs 9,163.