Crude oil prices fell as geopolitical concerns eased. Oil fell 0.79% to close at Rs. By shedding Rs 9,723. During the session 77. Traders pulled back from risk premiums after news emerged that the United States and Iran were moving toward diplomatic talks, allaying fears of an immediate Middle East supply disruption despite ongoing tensions around Saudi Arabia.
Diplomats are taking rapid steps. Qatari mediators traveled directly to Tehran to broker peace. Also, high-ranking representatives of Saudi Arabia, Türkiye and Pakistan are getting ready to sit down with Iranian leaders to ease tensions.
Global Supply Shifts and Inventory Realities
Despite progress in diplomacy, the International Energy Agency issued a dire warning: Energy markets may still struggle to return to pre-war normality by 2027.
Over in the United States, official data showed commercial crude inventories dropped by 3.06 million barrels, bringing total stockpiles to 412.5 million barrels for the week ending October 16. That drop was much steeper than the expected 820,000-barrel decline. Gasoline reserves also fell sharply by 2.95 million barrels to 205.3 million barrels. On the flip side, distillate supplies unexpectedly gained 1.68 million barrels to reach 104.3 million barrels. Refinery runs dipped slightly by 0.1% to 93.4%, while crude tanks at the key Cushing hub added 987,000 barrels.
OPEC cuts demand due to more pressure from major producers
OPEC has cut its 2026 global oil demand growth forecast to just 400,000 barrels per day. This is well below their initial estimate of 1.4 million barrels per day for the year, marking the sixth consecutive time they have reduced the number. However, the group raised its 2027 forecast, betting on deferred demand and restocking on the road.
Meanwhile, physical supply numbers jumped. Saudi Arabia told OPEC its September crude oil output reached 8.372 million barrels per day, more than 2 million barrels per day more than in August. Russia also increased its production by 65,000 barrels per day in September to 8.43 million barrels per day, although less than a year earlier. Looking ahead, Saudi Aramco is setting up crude oil storage facilities in Singapore from late 2027 to safeguard its Asian supply chains.
Crude Oil Technical Outlook
If we look at the technical setup, crude oil has been going through a period of slowdown for a long time. Open interest fell 0.97% to Rs 14,642 active contracts. 77 Fall in price.
For chart watching traders, the immediate floor support sits at Rs. 9,580. A break below that level could take prices down to Rs. 9,440. On the contrary, Rs. 9,845 acts as main resistance. If buyers overcome that hurdle, crude oil may move again towards Rs. 9,970.
Is Saudi Aramco (2222) a bargain right now?
Our valuation model runs 17 different tests to determine the true intrinsic value of Saudi Aramco (ticker 2222) today. It directly compares the current trading price with its calculated fair value against thousands of other global equities, letting you instantly know whether Aramco is a solid discount play or whether better opportunities exist elsewhere.
Key tips for crude oil traders
- De-escalation pressure prices:Diplomatic negotiations involving Iran, Qatar and regional partners are removing war risk premiums from oil contracts.
- Increasing Output Counter Inventory Draw:US inventories fell sharply as Saudi Arabia added more than 2 million barrels per day to monthly output.
- Major Trading Levels:Keep a close eye on Rs 9,580 for negative support. 9,845 for upside resistance.