Crude oil settled down 0.88% at Rs 8,552 as the market responded to the International Energy Agency’s initiatives to expedite the release of oil stocks and focus on diesel supplies. This comes in the context of record-high fuel prices and a constricting global supply situation exacerbated by the Iran war. Geopolitical risks have persisted at high levels following the Houthis’ assault on Aden International Airport using ballistic missiles and explosive-laden drones. Concurrently, a developing storm in the Gulf of Mexico is anticipated to evolve into the first Atlantic hurricane of 2026, posing a potential threat to US oil and gas infrastructure.
UBS has revised its Brent price forecasts, projecting prices to reach $100 per barrel in the fourth quarter of 2026, an increase from its earlier estimate of $80. Additionally, the firm has raised its average forecast for 2026 to $91.57, up from $83.74, attributing these adjustments to greater-than-anticipated disruptions in Middle East oil flows and uncertain recovery prospects. US crude inventories experienced a significant decline, as EIA data revealed a reduction of 3.2 million barrels, bringing the total to 424.1 million barrels for the week ending October 2. This outcome contrasts sharply with market expectations, which had anticipated an increase of 1.7 million barrels. Crude inventories at Cushing experienced an increase of 444,000 barrels, whereas refinery crude runs saw a rise of 223,000 barrels per day, with utilisation advancing to 92.7%.
Petrol inventories rose by 0.4 million barrels, reaching a total of 204.7 million, whereas distillate stocks remained largely stable at 105.1 million barrels. US crude imports fell by 53,000 barrels per day, while an additional 800,000 barrels were drawn from the Strategic Petroleum Reserve, reducing holdings to 283 million barrels. 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 constrained refining capacity may exacerbate market tightness as disruptions in the Middle East are expected to continue into 2027.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 1.18% decline in open interest to 9,390, alongside a price drop of Rs 76. This suggests a trend of position unwinding rather than a wave of aggressive new selling. Crude oil is currently supported at Rs 8,448, and a persistent breach of this threshold may lead to a reevaluation at Rs 8,345. On the upside, resistance is positioned at Rs 8,739, and a decisive move above this level could propel prices toward Rs 8,927.
