Due to Hurricane Isaias’ disruption of US Gulf of Mexico production, which partially offset lessening geopolitical concerns surrounding the Middle East, crude oil finished 0.19% higher at Rs. 8,881, gaining Rs. 17. US offshore producers have curtailed substantial output, with around 1.3 million barrels per day, representing 62.9% of current production, reported as offline, as per the US Marine Minerals Administration. However, gains remained constrained following President Donald Trump’s assertion that Washington would refrain from military action against Iran prior to the November 3 midterm elections, referencing constructive dialogues aimed at resolving the six-month conflict.
Despite these developments, risks to shipping through the Strait of Hormuz remain significant, as the route historically managed around 20% of global oil and fuel shipments prior to the conflict. Meanwhile, the International Energy Agency endorsed the expedited release of around 100 million barrels of previously committed emergency oil stocks, prioritising diesel supplies. US crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ending October 2, contrary to expectations for a rise of 1.7 million barrels. Refinery utilisation increased to 92.7%, and petrol inventories saw a rise of 0.4 million barrels, reaching a total of 204.7 million barrels.
OPEC+ has opted to keep its production targets for November steady, while OPEC has revised its forecast for global oil demand growth in 2026 down to 380,000 barrels per day, representing the fifth consecutive downward adjustment. Conversely, the IEA cautioned that extended disruptions in the Middle East could exacerbate global supply constraints into 2027, as diminishing inventory buffers and pressured refining capacity heighten market risks. Guyana’s oil production decreased to 832,000 barrels per day in August, down from 886,000 barrels per day in July, contributing to supply uncertainty.
Crude oil is currently experiencing short covering, evidenced by a 0.75% decline in open interest to 9,688 contracts, alongside a price increase of Rs. 17. Immediate support is positioned at Rs. 8,756, succeeded by Rs. 8,630, whereas resistance is established at Rs. 8,964 and Rs. 9,046. A sustained move above Rs. 8,964 could extend the recovery toward Rs. 9,046, whereas a break below Rs. 8,756 may expose the next support at Rs. 8,630.
