Crude oil prices declined by 0.99%, settling at ₹6,596, as markets reacted to reduced fears of a broader conflict in the Middle East, which could have threatened crude supply from one of the world's major oil-producing regions. The market sentiment was further influenced by OPEC cutting its 2024 demand forecast, even as the group and its allies, known as OPEC+, prepare to increase output from October. Meanwhile, the IEA maintained its 2024 global oil demand growth forecast but slightly reduced its 2025 estimate due to the impact of Chinese consumption. The IEA highlighted that the end of a post-COVID economic recovery in China is limiting global oil demand.
However, this was offset by robust demand in advanced economies, particularly in the United States, where a significant portion of global gasoline is consumed. The IEA also noted that the ongoing summer driving season in the U.S. is expected to be the strongest since the pandemic, contributing to tightening in the physical market, exacerbated by OPEC+ supply cuts. U.S. crude oil inventories saw a sharper-than-expected decline of 3.728 million barrels for the week ending August 2, 2024, marking the sixth consecutive weekly decline, all of which exceeded market expectations. However, stocks at the Cushing, Oklahoma delivery hub increased by 579 thousand barrels, while gasoline and distillate fuel inventories also rose.
Technically, the crude oil market is under long liquidation, with a significant drop in open interest by 37.87% to 8,058 contracts, as prices fell by ₹66. Crude oil is currently supported at ₹6,534, with further downside potential towards ₹6,472 if this level is breached. On the upside, resistance is expected at ₹6,697, and a move above this level could lead to prices testing ₹6,798.