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prices surged by 3.01% to settle at 6152, primarily driven by escalating tensions in the Middle East. The US conducted strikes on Houthi targets in Yemen, and Pakistan retaliated with military strikes on separatist targets in response to Iran’s actions. This geopolitical unrest in the region contributed to the upward momentum in oil prices. On the supply side, the API reported an unexpected increase of 0.483 million barrels in US crude inventories last week.
However, the decline in Cushing, Oklahoma, provided a partial offset. Extreme cold weather conditions in North Dakota, a major US oil-producing state, resulted in a notable reduction of 650,000 to 700,000 barrels per day in oil output. OPEC’s monthly report indicated a positive outlook for global oil demand, forecasting a robust increase of 1.85 million barrels per day to reach 106.21 million bpd by 2025. The IEA also revised its 2024 oil demand growth forecast upward by 180,000 bpd to 1.24 million bpd. Contrastingly, the US EIA reported a fifth consecutive monthly decline in oil output from top shale-producing regions.
From a technical standpoint, the market is currently undergoing short covering, evidenced by a significant drop in open interest by -28.37%, settling at 2282. Prices rose by 180 rupees. Crude oil is finding support at 6043, and a breach below could test the 5935 levels. On the upside, resistance is likely at 6216, and a move above could lead to prices testing 6281.
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