Crude oil settled sharply lower by 2.74% at 5,718 as markets weighed the impact of fresh U.S. tariff threats on global economic growth prospects. President Trump’s move to slap a punitive 50% tariff on Brazilian exports intensified concerns over trade disruptions, adding to existing headwinds for global oil demand. Despite this bearish macro sentiment, oil found some support from robust underlying fundamentals—global daily flights hit a record average of 107,600 in early July, with Chinese flights at a five-month high, signaling steady jet fuel demand. On the supply side, OPEC+ remains committed to ramping up production further in September as members unwind voluntary cuts and the UAE moves to a larger quota.
Meanwhile, EIA data painted a mixed picture: U.S. crude stocks surged by 7.1 million barrels, surprising the market which had expected a draw. Crude inventories at Cushing also rose modestly. However, gasoline demand climbed 6% to 9.2 million bpd last week, while gasoline and distillate stocks fell by 2.7 million and 825,000 barrels respectively, highlighting resilient refined product consumption. The EIA revised its 2025 U.S. production outlook slightly lower to 13.37 million bpd due to slowing drilling activity as producers react to lower prices and policy uncertainty.
Technically, the crude oil market is under long liquidation as open interest tumbled by 14.46% to 10,451 while prices dropped 161 rupees. Crude is now finding support at 5,658; a break below could test 5,599. Resistance is seen at 5,828, with a move above likely to push prices towards 5,939.
