Crude futures see long build-up as supply concerns fuel bullish bets

Despite the sharp rally, analysts believe crude could remain volatile in the near term. “There is upside risk, but given the sharp appreciation in prices, we also anticipate a correction from such levels,” Trivedi said. He expects WTI crude to trade in a range of $90–$120 per barrel, while MCX crude may move between Rs 7,500 and Rs 9,800.

• Crude oil futures see fresh long positions amid supply concerns
• Open interest in crude oil March contract rises by 2,000 lots
• Analysts predict WTI crude volatility, trading at $90–$120 per barrel

Did our AI summary help?

Crude oil futures witnessed a fresh build-up of long positions as traders bet on further upside in prices amid escalating geopolitical tensions and concerns over supply disruptions, according to market analysts.

Fresh longs dominate crude futures

Aamir Makda, Commodity & Currency Analyst at Choice Broking, said open interest in the crude oil March contract has increased significantly over the past two sessions. Open interest has climbed to around 17,000–18,000 lots, marking an increase of nearly 2,000 lots from the previous day. Rising open interest alongside higher prices typically signals the creation of fresh long positions in the market. “This suggests traders are expecting further upside momentum in crude oil prices,” Makda said.

Bullish positioning amid supply concerns

Market sentiment remains strongly bullish, largely supported by geopolitical tensions and fears of supply disruptions.

Much of the concern centres around the strategic Strait of Hormuz, a key oil transit chokepoint through which roughly 20–25% of global crude supply passes. Any escalation in tensions or disruption to shipments through the strait could push prices higher.

However, analysts say that the rally remains heavily dependent on geopolitical developments. “If there is any de-escalation in war conditions and if Iran removes the blockade around the Strait of Hormuz, we could see a correction,” Makda said.

In such a scenario, the immediate support level on MCX crude oil could be around Rs 6,750, with the next key support near Rs 6,000 on the daily chart.

Signs of short build-up after sharp rally

Jigar Trivedi, Senior Research Analyst at Reliance Securities, added that some short positions are emerging after the sharp surge in crude prices.

“We are seeing short positions being built in crude oil after it skyrocketed by around 26% in the morning session,” Trivedi said.

He added that while fresh long positions could still enter the market, the rapid rise within a short span raises the risk of volatility and profit-taking.

“If geopolitical disruptions ease, a sharp correction may come in the oil market. WTI crude could fall below $90 per barrel, while MCX crude may drop toward ₹9,100 in line with global trends,” he said.

OPEC supply response crucial

The recent spike in prices has also revived focus on potential supply responses from producers such as OPEC and its allies.

“If WTI settles around $120 per barrel in the coming weeks, OPEC could increase production capacity,” Trivedi said, adding that the Strait of Hormuz remains a key area of concern given its importance to global oil trade.

Despite the sharp rally, analysts believe crude could remain volatile in the near term. “There is upside risk, but given the sharp appreciation in prices, we also anticipate a correction from such levels,” Trivedi said. He expects WTI crude to trade in a range of $90–$120 per barrel, while MCX crude may move between Rs 7,500 and Rs 9,800. For the short to medium term, he advises selling on rallies.