DBT Bureau
Pune, 16 July 2026
Crude oil prices rose 0.38% to settle at 7,613 as escalating geopolitical tensions in the Middle East intensified concerns over global oil supplies. Fresh U.S. strikes on Iranian military assets and the reinstatement of a naval blockade targeting Iranian ports near the Strait of Hormuz heightened fears of potential disruptions to one of the world’s most critical energy shipping routes. President Donald Trump also pledged to continue military operations until Iran halts attacks on commercial shipping and reopens the Strait, reinforcing the risk premium in oil prices. Supply-side fundamentals remained mixed despite the geopolitical support. U.S. crude oil inventories declined by 1.693 million barrels during the week ended July 10, reversing the previous week’s increase, although the draw was smaller than market expectations. Gasoline inventories fell by 1.533 million barrels, while distillate stocks increased by 4.556 million barrels. Net U.S. crude imports also declined for the first time in four weeks. Meanwhile, Strategic Petroleum Reserve holdings dropped by nearly 3 million barrels to 316.5 million barrels, the lowest level since 1983, with total U.S. crude inventories falling to their lowest since 1984. OPEC revised down its 2026 global oil demand growth forecast to 780,000 barrels per day for the third consecutive month, although it raised its outlook for 2027 demand. OPEC+ also confirmed another production quota increase of 188,000 barrels per day from August, though actual output remains constrained by ongoing regional disruptions. Technically, crude oil is witnessing short covering as open interest declined 9.16% while prices advanced, indicating the unwinding of bearish positions. Immediate support is placed at 7,503, followed by 7,392, while resistance is seen at 7,761 and 7,908. A sustained move beyond these levels is expected to determine the market’s next directional trend.
Market analysis:
- Crudeoil trading range for the day is 7392-7908.
- Crude oil rose as escalating tensions in the Middle East continued to fuel supply concerns.
- President Trump pledged to intensify military operations until Iran halts attacks on vessels in the Strait.
- Goldman Sachs said Brent could exceed $110 in the fourth quarter
Natural gas prices gained 1.29% to settle at 282.7, supported by short covering after recent declines, although the broader fundamental outlook remained influenced by rising domestic production and weaker LNG export demand. Maintenance work at Freeport LNG’s export facility in Texas continued to restrict gas flows for liquefaction, increasing supplies available for the domestic market. The facility is expected to remain under maintenance until late August, limiting export demand despite continued geopolitical disruptions affecting LNG shipments through the Persian Gulf. Supply conditions remained comfortable as average natural gas production in the Lower 48 states increased to 110.2 billion cubic feet per day in July from 110.0 bcfd in June. At the same time, near-record solar and wind power generation continued to reduce natural gas consumption for electricity generation. Storage data also reflected ample supply, with the U.S. Energy Information Administration reporting a larger-than-expected storage injection of 61 billion cubic feet for the week ended July 3, exceeding both market expectations of 49 bcf and the five-year average of 51 bcf. Total working gas in storage reached 2.983 trillion cubic feet, standing 0.5% below last year’s level but 6.6% above the five-year average. Looking ahead, the EIA expects both U.S. natural gas production and demand to reach record highs over the next two years, while LNG exports are projected to rise steadily from 15.1 bcfd in 2025 to 17.4 bcfd in 2026 and 18.6 bcfd in 2027. Technically, natural gas is witnessing short covering as open interest declined 5.06% while prices moved higher, indicating the exit of bearish positions. Immediate support is placed at 278.6, followed by 274.6, while resistance is seen at 285.2 and 287.8. A sustained move beyond these levels will likely determine the market’s next short-term direction.
Market analysis:
- Naturalgas trading range for the day is 274.6-287.8.
- Natural gas gained on short covering after process dropped on rising output and lower flows to LNG export plants.
- Scheduled maintenance outages in Freeport LNG’s export facility in Texas prevented gas flows from being ready for export.
- Average gas production increased to 110.2 billion cubic feet per day so far in July from 110.0 in the previous month.
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Sourece: Kedia Stocks & Commodities Research Pvt. Ltd.
