WTI Crude Oil (USOIL) Dips Below $65 as OPEC Plans 411K bpd Boost and Tariffs Cloud Outlook
Oil prices are under renewed pressure as the OPEC+ alliance signals a fresh production increase. The group is widely expected to approve...
Quick overview
- Oil prices are facing downward pressure as OPEC+ plans to increase production by 411,000 bpd in August, marking a fourth consecutive monthly rise.
- Analysts suggest that the market is adjusting to OPEC+'s accelerated supply, which is contributing to price pressures despite easing geopolitical risks.
- US trade tensions are resurfacing, with potential tariffs looming for countries that do not reach agreements by the July 9 deadline, impacting global growth and oil demand expectations.
- WTI crude is currently trading at $64.73, with key technical levels indicating resistance and support, while traders are advised to remain cautious amid market uncertainties.
Oil prices are under renewed pressure as the OPEC+ alliance signals a fresh production increase. The group is widely expected to approve a 411,000 barrels per day (bpd) hike for August during its upcoming July 6 meeting—marking the fourth consecutive monthly increase. If confirmed, the total output expansion in 2025 would rise to 1.78 million bpd, accounting for nearly 1.5% of global demand.
Analysts at ANZ and ING say the market is adjusting to the idea that OPEC+ is accelerating supply into year-end, supported by ample spare capacity and stable geopolitical footing. This production flexibility is adding pressure to prices, even as geopolitical risks appear to fade.
At the same time, US trade tensions are back in focus. Treasury Secretary Scott Bessent reiterated that countries failing to reach agreements before the July 9 deadline could face tariffs as high as 50%—first announced in April. These threats are reintroducing downside risks for global growth and oil demand expectations.
Oil Slips Despite Ceasefire Relief, Outlook Turns Cautious
While Brent crude briefly surged past $80 in mid-June amid Israel-Iran tensions, prices have since reversed sharply. After a US strike on Iranian nuclear sites and a ceasefire led by former President Trump, market attention has shifted back to fundamentals.
Morgan Stanley has revised its outlook, forecasting Brent will fall to $60 by early 2026, citing increased production and diminished risk premiums. The bank also projects a 1.3 million bpd global surplus in 2026, adding to medium-term bearish pressure.
WTI at $64.73: Technical Levels and Trade Outlook
West Texas Intermediate (WTI) crude is trading at $64.73, clinging to trendline support near $64.03 after dropping from the June high of $77.11. The breakdown below the 0.786 Fibonacci retracement at $74.31 accelerated selling, pushing oil through multiple key levels.
While bearish momentum is slowing, evidenced by a flattening MACD, there’s still no confirmation of a reversal. The 50-period EMA at $65.75 remains key short-term resistance.
Technical Levels to Watch:
- Resistance: $65.75 → $67.10
- Support: $64.03 → $62.85 → $61.47
- Fibonacci Retracements: $69.01 (0.382), $72.11 (0.618), $74.31 (0.786)
Trade Setup Ideas:
- Bullish Scenario: Long above $65.75 with targets at $67.10 and $69.01
- Bearish Scenario: Short below $64.00, targeting $62.85 and $61.47
Final Thoughts
Crude oil is navigating a complex macro backdrop—caught between rising OPEC+ output, tariff-driven demand risk, and technical consolidation. Until a clear breakout or breakdown confirms the next leg, traders should approach with caution and let volume and price structure lead the way.
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