WTI remains under pressure after OPEC+ confirmed another production increase for August, extending its gradual supply normalization for a fifth consecutive month. The decision reinforced expectations of improving global crude availability, while Saudi Arabia's lower official selling prices for Asian buyers signaled intensifying competition among major exporters.
Although geopolitical risks in the Middle East have eased from recent highs, they have not disappeared completely, preventing a deeper decline in oil prices.
Falling U.S. inventories provide fundamental support
The bearish impact of higher expected supply continues to be balanced by resilient U.S. fundamentals. The latest EIA report showed commercial crude inventories falling for a tenth consecutive week, leaving stockpiles below the five-year seasonal average as refinery activity remained strong. Healthy physical demand and relatively firm fuel consumption continue to limit downside pressure even as the broader market becomes more cautious.
Technical picture points to early stabilization
The hourly chart suggests that selling pressure is beginning to ease after an extended decline. WTI has started to stabilize around the $70 area, with price attempting to recover above its short and medium-term moving averages. Even so, the long-term moving average remains firmly downward sloping, indicating that the broader bearish trend is still intact. A sustained move above nearby resistance would strengthen the recovery outlook, while failure to hold current levels could bring recent lows back into focus.
Market awaits fresh demand signals
Attention is now shifting toward upcoming U.S. inventory data, global demand indicators, and further developments in OPEC+ policy. Signs of stronger consumption or additional inventory draws could support a broader recovery. Conversely, further evidence of increasing global supply or weaker economic activity would likely reinforce the current cautious tone and limit upside potential for WTI, as I did note in the article WTI extends correction as rising supply tempers geopolitical premium.
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