New diplomatic efforts raise hopes of ending US-Iran war, crude oil falls

Kedia Advice -Crude oil fell 2.31% to close at Rs 9,498. The decline came as fresh diplomatic talks aimed at ending the US-Iran conflict boosted expectations of lower geopolitical risks and stable energy supplies. Iran's Supreme Leader Ayatollah Khamenei urged an end to a state of "neither war nor peace", while talks that also included Saudi Arabia, Pakistan and Turkey indicated a possible breakthrough.

Even with the optimism, downside remained limited as supply concerns persist. Renewed Houthi attacks on Saudi sites and rising tensions around the Strait of Hormuz have cast a shadow over regional flows. Gulf crude oil exports declined for the fourth consecutive week, with shipments through the Strait of Hormuz running at about 60% of normal levels.

US crude oil inventories fell by 3.06 million barrels in the week ended October 16 to 412.5 million barrels, much larger than the expected 820,000‑barrel decline. Gasoline stockpiles fell 2.95 million barrels to 205.3 million, contrary to forecasts for a decline, while distillate stocks rose 1.68 million barrels to 104.3 million.

OPEC cut its 2026 global oil demand growth forecast to 400,000 bpd, down from 1.4 million bpd at the start of the year. This marks the sixth consecutive decline, although the group has lifted its 2027 outlook, betting on inventory rebuilding and a subsequent rebound in demand. OPEC also reported higher production across the OPEC+ family in September, driven mainly by a sharp jump in Saudi production.

Russian crude oil output rose by 65,000 bpd in September to 8.43 million bpd, but still remained below last year's levels due to ongoing refinery problems, the International Energy Agency said.

From a technical perspective, traders are opening long positions. Open interest fell 3.26% to 14,165 contracts and prices fell by around Rs 225. The next support zones lie at Rs 9,380 and Rs 9,265, while resistance lies at Rs 9,705. A clear break above Rs 9,705 could take the market towards Rs 9,915; If it falls below Rs 9,380, it may fall to Rs 9,265.

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Key tips for crude oil traders

• Prices are falling as diplomatic talks ease US-Iran tensions, but supply risks from Houthi attacks have limited losses.
• U.S. crude inventories fell sharply, while gasoline stocks declined and distillate stocks unexpectedly increased.
• OPEC's repeated demand-growth cuts indicate a cautious outlook, yet the forecast to 2027 is more encouraging.
• Technical charts show decline in open interest; For next moves look for support at Rs 9,380 and resistance at Rs 9,705.