Crude oil prices recently declined, ending the trading session 0.91% lower at Rs. 9,709. The decline came as traders reacted to fresh signs that the United States and Iran may resume diplomatic talks. When word spread that the two sides could actually sit down and talk, fears of a sudden supply cut in the Middle East began to fade away from the market.
US Vice President JD Vance arrived to resume peace discussions with Tehran, reports said. At the same time, Iranian officials indicated that diplomatic avenues were open. That combination gave energy traders reason to breathe a sigh of relief. Still the market did not crash completely. Ongoing drone and missile attacks by Yemen's Houthi fighters, as well as talk of new US steps against Iran following the November 3 midterm elections, kept sellers from pushing prices too low. Big institutional money is also being monitored. UBS actually raised its end-2026 Brent crude target to $110 a barrel from $100, warning that Gulf production risks aren't going away any time soon.
US storage data and global output trends
In the United States, official inventory numbers showed mixed signals. Crude oil stockpiles fell by 1.9 million barrels during the week ended October 23, taking total stockpiles to 410.6 million barrels. That decline surprised many, as analysts had expected modest growth. Storage at the key Cushing hub declined by 624,000 barrels and distillate supplies fell by 1.5 million barrels. Gasoline stocks, on the other hand, rose by 3.9 million barrels, well ahead of Street estimates. At the same time, U.S. refinery capacity declined 0.6 percentage points to 92.8%.
On the international stage, OPEC took another stab at its growth numbers. The group has cut its 2026 global oil demand growth forecast to just 400,000 barrels per day. This marks the sixth consecutive cut, a sharp decline from the 1.4 million barrels per day forecast at the start of the year. However, OPEC expects a healthy rebound in 2027 as global buyers rebuild their depleted reserves. OPEC+ total output rose in September, driven mainly by heavy pumping from Saudi Arabia. The International Energy Agency also reported that Russian crude oil production rose by 65,000 barrels per day in September to 8.43 million barrels per day, although refinery outages are still keeping Russian volumes below last year's pace.
Crude Oil Chart Setup and Market Structure
From a chart reader's perspective, crude oil looked to be in a prolonged downtrend. Open interest fell sharply by 18.47% to 13,713 active contracts, while prices declined by Rs. 89.
Right now, crude oil is testing the close support of the rupee. 9,565. If sellers breach that floor, the next major safety net is around Rs. 9,420. On the positive side, buyers face immediate selling pressure near Rs. 9,795. If prices manage to break that barrier and stay above it, the market could move sharply towards the rupee. 9,880.
Key tips for crude oil traders
- Diplomacy Cool-Off:Potential US-Iran peace talks are temporarily keeping panic buying at bay, but geopolitical friction in the Red Sea is preventing deeper selling.
- Uneven Inventory Data:The decline in US crude oil stocks contrasts with rising motor fuel supplies, suggesting that demand for the product remains somewhat volatile.
- Watch key technical pivot levels:Keep an eye on the rupee on downside to Rs 9,565. 9,795 on the upside to gauge the next clean directional break.