Forex Trading Tools and Services

Commodities Oil – US Crude

WTI Drops Below $61 on OPEC+ Output Increase Fears and Higher US Crude Inventories

  • BY
  • May 23, 2025
  • 0 Comments

West Texas Intermediate (WTI) crude oil dipped below $61.00 in early Asian trading on Friday, following higher supply worries and geopolitics. The drop follows reports that the OPEC+ cartel is set to raise production substantially over the next few months, rising by as much as 2.2 million barrels per day by November. In addition, U.S. crude stockpiles increased unexpectedly by 1.328 million barrels last week, contrary to a drawdown forecast. At the same time, increased tensions in the Middle East, driven by rumors of possible Israeli attacks on Iranian nuclear sites, inject uncertainty into the market in anticipation of new U.S.-Iran nuclear negotiations in Rome. All these elements collectively bear down on oil prices, creating concern over an oversupplied market. KEY LOOKOUTS • Investors will be watching closely for coming OPEC+ meetings for assurance of additional production increases, which may further stress oil prices if supply far outpaces demand. • The result of Friday’s Rome talks has the potential to influence oil market sentiment. Any indication of a diplomatic breakthrough could result in expectations of sanctions removed on Iranian oil exports, providing additional supply to the world market. • The possible Israeli attack on Iranian nuclear facilities can spur regional unrest, threatening the risk of supply disruptions from a region that accounts for a sizeable portion of world oil production. • After the surprise build in crude inventory, traders will carefully monitor future EIA releases. Sustained inventory builds can indicate weaker demand or excess production, supporting bearish pressure on WTI prices. Traders and analysts are keeping a close eye on a number of key developments that have the potential to set the tone for the direction of WTI crude oil prices in the near future. OPEC+ is set to increase production of oil over the next few months, potentially contributing an extra million or more barrels per day to worldwide supply, potentially capping any price momentum higher. Meanwhile, the surprise build in U.S. crude inventories warns of potential demand weakness or oversupply. Geopolitical tensions are a top wildcard, especially as Israel considers potential attacks against Iranian nuclear sites, which could unbalance the oil-rich Middle East. At the same time, the result of the U.S.-Iranian nuclear negotiations in Rome has on-going market volatility depending on whether or not progress is made toward loosening sanctions on Iranian oil exports. WTI crude prices continue to face pressure as U.S. inventories rise and OPEC+ considers raising output. Geopolitical tension and the prospect of future U.S.-Iran nuclear negotiations introduce yet more uncertainty, with any agreement potentially adding to global oil supply. •  WTI crude fell below $61, quoting around $60.75 in early Asian trading on Friday. •  OPEC+ intends to raise output, possibly an additional 2.2 million barrels per day by November. •  U.S. crude stocks increased by 1.328 million barrels last week, contrary to expectations of a decline. •  The mood in the market, however, is bearish on fears that supply will surpass demand growth. •  Israel can potentially attack Iranian nuclear sites, which will fuel heightened geopolitical tensions in the Middle East. •  U.S.-Iran nuclear negotiations in Rome are under the spotlight; developments can result in more Iranian oil exports. • Volatility in the oil market will continue, fueled by supply dynamics and geopolitical tensions. West Texas Intermediate (WTI) crude oil is on the back foot as market focus shifts to increasing global supply and continuing geopolitics. OPEC and OPEC+, or OPEC and its allies, are said to be set to ramp up oil production in the next few months to capture market share back. The action is taking place as the world economy is still finding a balance between pandemic recovery and changing energy needs. With additional barrels possibly hitting the market, there is an increasing concern on how this will match with existing demand levels, particularly as economic uncertainty persists in main regions. WTI CRUDE OIL DAILY PRICE CHART CHART SOURCE: TradingView Besides supply considerations, geopolitical tensions are also impacting the mood of the market. The United States and Iran will have new nuclear negotiations soon, which have potential sanctions and implications for future Iranian oil exports. While that is happening, reports indicate that Israel is planning to attack Iranian nuclear sites, with this heightening the danger of conflict in a crucial oil-producing area of the world. The result of these security and diplomatic developments will be closely monitored, as they have the potential to affect considerably the long-term balance of oil supply and stability in the energy markets. TECHNICAL ANALYSIS WTI crude oil is exhibiting bearish momentum as it sits below major support levels, recently falling below the $61.00 level. The price action indicates heightened selling pressure, with the next area of support pegged at $60.00, an important psychological level. Momentum measures such as the Relative Strength Index (RSI) could be indicating diminishing buying appetite, and moving averages might be positioned in a manner that indicates further risk to the downside. Sellers would be observing in anticipation of confirmation of trend extension or a potential reversal if the price is able to sustain above key support levels during the coming sessions. FORECAST WTI crude oil may experience upwards movement if Middle Eastern geopolitical tensions rise, especially between Iran and Israel, potentially slowing down regional supply routes and inducing a risk premium in prices. Moreover, any beneficial development in the U.S.-Iran nuclear negotiations delaying or aborting Iranian oil re-entry into the market can also be bullish for prices. An unexpected draw in upcoming U.S. crude inventories or evidence of firming global demand—particularly from big consumers such as China or India—can further lift prices in the short term. To the downside, WTI can continue to be pressured if OPEC+ goes ahead with its scheduled production rises, overwhelming the market with more supply. A sustained rise in U.S. crude inventories, as seen in recent EIA reports, would reinforce concerns of an oversupplied market. Furthermore, a successful U.S.-Iran nuclear agreement could eventually lift sanctions on Iranian oil exports, introducing more barrels into an

Read More
Commodities Oil – US Crude

WTI Crude Rises Past $62.50 as Middle East Geopolitical Tensions and Supply Fears Mount

  • BY
  • May 21, 2025
  • 0 Comments

Prices for West Texas Intermediate crude oil have risen past $62.50 a barrel, up for the fourth straight session, as tensions in the Middle East rise and supply worries build. The spike comes amid reports that Israel is considering possible attacks on Iranian nuclear sites, causing concern about retaliatory attacks that will interrupt oil shipments through the key Strait of Hormuz—a conduit for exports from top Gulf producers. Although the increased supply anxiety mounts, the benefit may be clipped by a surprise increase in U.S. crude inventories, with the API saying it rose 2.49 million barrels, defying expectations of a draw. In addition, Kazakhstan’s surprise increase in oil output puts additional pressure on global supply dynamics leading up to the release of the EIA’s inventory data. KEY LOOKOUTS • Markets are waiting anxiously for confirmation or intensification of Israeli intentions to attack Iranian nuclear facilities and interrupt oil supply routes and global stability considerably. • Any Iranian retaliation that leads to a blockade or disruption in the Strait of Hormuz could severely impact crude oil exports from key producers like Saudi Arabia, Kuwait, Iraq, and the UAE. • Investors await the upcoming EIA Crude Oil Stocks Change report, which could either reinforce or offset current bullish momentum depending on whether it confirms the API’s unexpected inventory build. • Kazakhstan’s rise in oil production, in defiance of OPEC+ pressure to cut supply, could impact wider debate within the alliance and influence the direction of future oil prices. Geopolitical tensions in the Middle East continue to keep oil markets anxious as Israel is said to be preparing to attack Iranian nuclear sites—spurring concerns of possible retaliation and disruption of crude flows through the critical Strait of Hormuz. This has propelled WTI above $62.50 on increased supply worries from major Gulf producers. The rally, however, may be threatened by a surprise U.S. crude build of 2.49 million barrels according to API data ahead of the closely followed EIA report. Further complications are introduced by Kazakhstan’s surprise 2% rise in oil output, even amidst OPEC+ production restrictions. WTI crude prices have jumped higher than $62.50 as tensions escalate in the Middle East with news of possible Israeli attacks on Iranian nuclear facilities. Supply fears are compounded by concerns of disruption via the Strait of Hormuz, but gains will be capped by a shocking build in U.S. crude stockpiles and increased output from Kazakhstan. •  WTI crude prices increased past $62.50, the fourth straight session of gains in wake of geopolitical tensions. •  Israel could attack Iranian nuclear facilities, raising the threat of regional conflict and supply disruption, according to reports. •  Any retaliation from Iran could close the Strait of Hormuz, a vital artery for global oil supplies from top Gulf producers. • API data indicated a 2.49 million-barrel build in U.S. crude inventories, against a forecasted 1.85 million-barrel draw. • The surprise U.S. inventory increase could put the lid on further price rises, signifying strongening supply in the world’s biggest oil consumer. • Kazakhstan boosted oil output by 2% last month, in defiance of OPEC+ pressure to restrain production, adding to global supply fears. •  Market participants wait for EIA stock details for further guidance, which may validate or defy API numbers and sway market mood. Middle East tensions have intensified with the news that Israel is weighing attacks on Iranian nuclear sites. This has generated serious concerns over possible oil supply disruptions, especially if Iran responds by closing the Strait of Hormuz — a vital shipping route for world crude shipments. The situation attracted international attention, as any war between key oil-producing countries in the region has the potential to affect the balance of energy markets and global relations. WTI CRUDE OIL DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, events beyond the Middle East are also defining the international oil outlook. The United States recorded a greater-than-anticipated build-up of its crude oil stocks, indicating an uptick in local supply. Meanwhile, Kazakhstan increased its oil output by 2% in May, above its quota limits as part of the OPEC+ accord. These are a mirror of the continued complexity of the international energy environment, where political risk and production choices from major producers keep impacting the overall landscape. TECHNICAL ANALYSIS WTI crude oil is maintaining steady bullish traction, trading above the $62.50 support zone and edging near $62.70 during early European trading. The price has furthered advances for a fourth consecutive session, reflecting robust short-term buying demand. If the bullish trend continues, the next resistance could be found around the zone of $63.50–$64.00. On the downside, immediate support lies near $62.00, supported by a stronger support level at $61.20. The momentum indicators, such as RSI, approach overbought territory, which may likely lead to a consolidation or pullback in the short term unless fresh drivers are seen for further gains. FORECAST WTI crude can extend its rally if geopolitical tensions in the Middle East intensify even more, especially if Israel goes ahead with a military strike against Iran or Iran attempts to close the Strait of Hormuz. Such an event would increase concerns over supply disruption from major Gulf producers, lifting prices. Further bullish pressure may arise if the next EIA report reveals a surprise U.S. crude inventory draw or if OPEC+ producers cut supply in reaction to market turbulence. If the bullish trend continues, WTI may test resistance values between $63.50 to $65.00 in the near future. However, crude oil prices could face downward pressure if geopolitical tensions ease or if it becomes clear that Israel has not made a final decision on military action. A further build in U.S. crude inventories, as signaled by recent API data, may also weigh on market sentiment, indicating stronger supply levels. Additionally, rising output from non-OPEC producers like Kazakhstan, and potential demand concerns, could contribute to a pullback. If the bearish strength intensifies, WTI can go down to support levels around $62.00 or even $61.20.

Read More