The main causes of crude oil deterioration:
Raw oil prices recorded a decline of 1.62% and stopped at a level of Rs 8,096 by slipping it. The biggest reason behind this fall is reducing geopolitical stress in the Middle East. US President Donald Trump indicated that after the appeal of many regional countries including Qatar, they are preventing any military action at the moment ahead of Iran. The focus of the market is now on the potential excess of supply due to the re-generating supply of oil from Gulf countries. JP Morgan estimates that in September there was a spur of 11 million barrels daily in the market, which increased to 14 million barrels per day in October
Mathematics of Global Supply and Demand:
Increased supply by large oil producers at global level, increasing pressure at prices. The production of OPAC led by Saudi Arabia, Kuwait and Iraq in October month has increased. While the US’s crude oil production reached the level of 1.40 crore barrels per day in the week ended October 30. However, the demand from China on the other hand saw a lighter improvement, where the import of crude oil in October increased by 9.4% of the month-to-month 98.8 million barrels daily, which is the highest level after March
Outlook of inventory data and OPAC:
THE U.S. CRUDE INVENTORY DECLINED BY 8.65 LAKH BARRELS AND IT REMAINED 40.98 CRORE BARRELS, WHILE THE MARKET WAS EXPECTED TO GROW BY 8.77 LAKH BARRELS. IN ADDITION, THE DISTILLATE STOCK FELL 36 MILLION BARRELS TO 9.93 CRORE BARRELS AND THE REFINERY UTILISATION INCREASED BY 1.7% TO 94.5%, WHICH REFLECTS THE SPEED OF REFINING ACTIVITY. WHILE OPAC HAS REDUCED GLOBAL OIL DEMAND GROWTH FORECAST FOR 2026 TO 4 LAKH BARRELS PER DAY, 14 LAKH BARRELS PER DAY AT THE BEGINNING OF THE YEAR. THIS IS A SIXTH MONTH WHEN THE ESTIMATE IS CUT. ACCORDING TO THE INTERNATIONAL ENERGY AGENCY (IEA), THE PRODUCTION OF RUSSIAN CRUDE OIL IN SEPTEMBER WAS INCREASED TO 84.3 MILLION BARRELS PER DAY. AT THE SAME TIME, SATORIANS HAVE MADE A HUGE REDUCTION OF 14,468 CONTRACTS IN THEIR NET LONG POSITION, CAUSING IT TO FALL TO 85,303
Technical Levels and Market Setup:
The crude oil on the technical front clearly shows the pressure of fresh selling. Open interest is increased by 5.26% to 9,827 contracts, while prices have declined at Rs. 133, indicating becoming new short positions in the market. According to the charts, the first support for crude oil is at Rs 7,920 and if it breaks, the expressions can slip up to Rs 7,745. On the top, the first resistance is made at Rs 8,215, and the next target can be of Rs 8,330 if the expressions go beyond it
Conclusions for Crude Oil Traders:
Decreasing geo-political tension in the Middle East and reaching the American production record height makes the pressure of the recession in short term on crude oil visible clean. Traders are advised to be alert on any boom in the market and plan their position only by taking into account the resistance of Rs 8,215 and support levels of Rs 7,920