Crude oil prices concluded the trading session with a 3% increase, reaching Rs 9,484, as the resurgence of Houthi attacks in Saudi Arabia intensified worries regarding rising tensions in the Middle East and the possibility of interruptions to global oil supplies. Supply risks have escalated following reports from Iran’s Islamic Revolutionary Guard Corps regarding attacks on four vessels engaged in illicit oil transfers in the northern Gulf. Additionally, three other vessels are said to have collided with mines to the west of the Strait of Hormuz. In Libya, the closure of a pipeline valve linking the Hamada and Tahara oilfields to Zawiya port has led to a decrease in production at both fields.
In a development that bolstered market sentiment, US crude inventories experienced a notable decline of 3.06 million barrels, bringing the total to 412.5 million barrels for the week ending October 16. This reduction significantly surpassed forecasts, which anticipated a draw of only 820,000 barrels. Petrol stocks decreased by 2.95 million barrels, bringing the total to 205.3 million barrels, whereas distillate inventories saw an increase of 1.68 million barrels, reaching 104.3 million barrels. In August, Saudi Arabia’s crude exports experienced a month-on-month increase of 7.9%, reaching 4.451 million barrels per day, marking the highest level since March. This rise occurred despite a reduction in production, which fell to 6.24 million barrels per day.
OPEC has adjusted its 2026 oil demand growth forecast downward to 400,000 barrels per day, a significant reduction from the 1.4 million barrels per day projected at the start of the year. This marks the sixth consecutive downward revision. However, the organization anticipates that deferred demand will bolster growth in 2027, as depleted inventories will necessitate replenishment. Meanwhile, Russian crude production rose by 65,000 barrels per day in September to 8.43 million barrels per day, although it continued to fall short of year-ago levels due to persistent refining disruptions.
The International Energy Agency reported that Russian crude exports increased to 5.3 million barrels per day, whereas Kazakhstan’s crude and condensate exports fell by 40,000 barrels per day to 1.8 million barrels per day. Crude oil is currently experiencing short covering, as evidenced by a 1.02% decline in open interest to 13,346 contracts, alongside a price increase of Rs 276, suggesting the closure of existing short positions. Immediate support is positioned at Rs 9,355, succeeded by Rs 9,220, whereas resistance is identified at Rs 9,570 and Rs 9,655. A sustained move above Rs 9,570 could extend the recovery toward Rs 9,655, whereas a break below Rs 9,355 may renew selling pressure.
