Crude oil concluded the trading session with a decline of 2.77%, settling at Rs 8,669, as indications of rising global supply overshadowed ongoing geopolitical uncertainties in the Middle East. The G7 nations have reached a consensus to release 100 million barrels of crude and diesel from their emergency reserves, all while continuing to uphold energy exports. This decision contributes to the anticipation of enhanced availability in the near term. During the last week of September, Persian Gulf crude exports surpassed pre-war levels on four out of seven days, notwithstanding the disruptions in the Strait of Hormuz and the continuing US-Iran conflict.
OPEC+ has decided to maintain its production targets for November, suggesting that any further policy changes are improbable until the following year. However, Gulf producers are still operating below their targets due to ongoing export disruptions. US crude inventories rose by 922,000 barrels to 427.3 million barrels, contrary to expectations for a 264,000-barrel draw, while Cushing stocks increased by 553,000 barrels. Refinery crude runs experienced a decline of 554,000 barrels per day, accompanied by a reduction in utilisation of 1.5 percentage points, bringing it down to 92.5%. Petrol inventories experienced a reduction of 1.7 million barrels, and distillate stocks saw a decline of 2.3 million barrels. Concurrently, net US crude imports diminished by 468,000 barrels per day.
OPEC has revised its 2026 global oil demand growth forecast down to 380,000 barrels per day, representing the fifth consecutive adjustment in a downward direction. Meanwhile, the IEA has cautioned that a protracted resolution of the Iran conflict may result in continued disruptions to Middle East supply flows extending into 2027. The IEA also pointed out that diminishing inventories and constrained refining capacity pose risks for tighter markets. Meanwhile, WTI speculative net long positions decreased by 17,317 contracts to 131,150, indicating a reduction in bullish exposure.
Crude oil is currently experiencing long liquidation, evidenced by a significant decline in open interest of 11.09%, bringing it down to 9,967, alongside a price drop of Rs 247. The market is currently identifying support at Rs 8,577, and a persistent breach beneath this threshold may reveal Rs 8,485. On the upside, resistance is positioned at Rs 8,784, and a decisive move above this threshold could catalyse a recovery toward Rs 8,899.
