Crude oil settled 0.30% lower at Rs. 8,953, declining by Rs. 27 as markets evaluated the implications of potential additional Russian energy supplies becoming available to global buyers in light of US President Donald Trump’s decision to temporarily ease restrictions on Russian diesel exports for six months. The initiative seeks to bolster American consumers; however, it has sparked apprehensions regarding the potential erosion of sanctions imposed on Russia. OPEC has revised its 2026 oil demand growth forecast downward for the sixth consecutive occasion, now estimating an increase of 400,000 barrels per day, a significant reduction from the initial projection of 1.4 million barrels per day at the start of the year.
Conversely, the organization has adjusted its 2027 forecast upward, anticipating that deferred demand and inventory rebuilding will bolster consumption. OPEC also reported a significant rise in September production within the broader OPEC+ coalition, spearheaded by Saudi Arabia, which indicated crude output of 8.372 million barrels per day, an increase of over 2 million barrels per day compared to August. The International Monetary Fund projected average oil prices of $96 per barrel in 2026 and $87 in 2027, exceeding its prior forecasts of $89 and $78, respectively.
In a scenario characterised by heightened conflict in the Middle East, it is plausible that prices may ascend to $130 per barrel in the first quarter of 2027. This development could lead to a reduction in global economic growth by 0.2 percentage points in 2026 and by 0.5 percentage points in 2027. Meanwhile, data from the US Energy Information Administration indicated that crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ending October 2, contrary to expectations for an increase of 1.7 million barrels. Refinery utilisation increased by 0.2 percentage points, reaching 92.7%. Concurrently, petrol inventories saw a rise of 0.4 million barrels, totalling 204.7 million barrels.
Distillate stocks held steady at 105.1 million barrels, while crude inventories at Cushing experienced an increase of 444,000 barrels. Crude oil is currently experiencing long liquidation, as evidenced by a 17.15% decline in open interest to 7,866 contracts, coupled with decreasing prices, which suggests a process of position unwinding. Immediate support is positioned at Rs. 8,796, succeeded by Rs. 8,639, whereas resistance is established at Rs. 9,059. A sustained move above resistance could lift prices toward Rs. 9,165, whereas continued weakness may expose lower support levels.
