Crude Oil settled up 3.16% at Rs 9,798, buoyed by renewed supply concerns following reports of a missile attack on Saudi Arabia’s largest oil refinery, which possesses a processing capacity of 550,000 barrels per day. Yemen’s Iran-aligned Houthis have asserted their responsibility for the strike, heightening apprehensions regarding the intensification of tensions in the Middle East and the possible ramifications for global oil supply chains. US crude inventories decreased by 1.9 million barrels to 410.6 million barrels in the week ending October 23, contrary to market expectations for a modest rise, while stocks at Cushing fell by 624,000 barrels.
Distillate inventories decreased by 1.5 million barrels, bringing the total to 102.8 million barrels, while petrol stocks rose by 3.9 million barrels, reaching 209.2 million barrels. Refinery utilisation decreased by 0.6 percentage points to 92.8%, while net US crude imports saw a decline of 796,000 barrels per day. Market participants closely observed the prevailing expectations regarding OPEC+’s adherence to its production targets set for December. OPEC has adjusted its 2026 global oil demand growth forecast downward to 400,000 barrels per day, a significant reduction from the 1.4 million barrels per day anticipated at the start of the year.
This marks the sixth consecutive downward revision. However, the organization has increased its outlook for 2027, anticipating that demand postponed due to the Iran war will eventually come to fruition. OPEC reported a significant rise in Saudi crude production in September, reaching 8.372 million barrels per day, an increase of over 2 million barrels per day compared to August. Meanwhile, 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 significantly below levels from the previous year. Russian crude exports rose to 5.3 million barrels per day, despite ongoing disruptions to refinery operations caused by Ukrainian strikes.
Potential declines in Russian exports and ongoing geopolitical risks continue to provide support, whereas forecasts of weaker demand growth may constrain additional advancements. Technically, the market is experiencing new buying activity, as evidenced by a rise in open interest of 18.74% to 16,819 contracts, coupled with a Rs 300 price increase, suggesting the establishment of new positions. Crude oil exhibits support at Rs 9,650; a decline beneath this threshold may lead to a test of Rs 9,505. Conversely, resistance is identified at Rs 9,910, and a sustained advance beyond this point could propel prices toward Rs 10,020.
