Crude oil concluded the trading session with an increase of 1.63%, reaching Rs. 9,177, driven by rising supply concerns in the Middle East, intensified assaults on shipping, and interruptions to Russian energy infrastructure. The US Central Command has confirmed that an Iranian projectile hit a Singapore-flagged container ship, which subsequently sank in the Strait of Hormuz. This incident has heightened concerns regarding physical oil flows and has driven tanker rates to unprecedented levels. Potential US measures to ease restrictions on certain Russian shadow fleet tankers have provided some relief by potentially enhancing shipping flexibility and lowering freight costs.
However, regional conflict and Ukrainian strikes on Russian refineries have constrained the extent of this relief. US crude inventories experienced a notable decrease, as the Energy Information Administration indicated an 8.6 million barrel draw, bringing the total to 415.6 million barrels for the week ending October 9. This figure significantly surpassed the anticipated decline of 288,000 barrels. Petrol inventories rose by 3.5 million barrels, reaching a total of 208.3 million barrels, whereas distillate stocks decreased by 2.5 million barrels, bringing the total down to 102.6 million barrels. Refinery utilisation increased by 0.8 percentage points, reaching 93.5%, while net crude imports saw a decrease of 596,000 barrels per day.
The International Energy Agency reported that Russian crude production increased by 65,000 barrels per day in September to 8.43 million barrels per day, remaining 870,000 barrels per day below year-earlier levels. Russian crude exports increased to 5.3 million barrels per day, even as refinery operations faced limitations due to Ukrainian attacks. OPEC has revised its 2026 oil demand growth forecast downwards to 400,000 barrels per day, a significant reduction from the 1.4 million barrels per day projected at the beginning of the year. This adjustment represents the sixth consecutive downward revision. Conversely, the organization has increased its outlook for 2027, anticipating that depleted inventories will necessitate a rebuilding effort.
OPEC has also indicated a rise in production for September within the broader OPEC+ coalition, spearheaded by Saudi Arabia. Crude oil is currently experiencing new buying activity, as evidenced by a 42.33% rise in open interest to 10,588 contracts, coupled with a price increase of Rs. 147, suggesting a robust bullish sentiment. Immediate support is positioned at Rs. 8,935, beneath which prices may test Rs. 8,690. Resistance is positioned at Rs. 9,310, and a sustained movement beyond this threshold may pave the way toward Rs. 9,445.
