West Texas Intermediate (WTI) crude oil retreated below $67.50 a barrel during Asian trading hours on Monday, reversing some of the gains made in the previous session. The decline follows increased oil production from Saudi Arabia that reportedly produced more than OPEC+ targets, as well as increased global trade tensions triggered by U.S. tariff announcements. Whereas Chinese trade figures indicated some improvement that may provide limited support for oil demand, the overall mood is still subdued as traders prepare for the possibility of U.S. sanctions on Russia and its effect on global supply.
KEY LOOKOUTS
• Saudi Arabia pumped more than its OPEC+ quota by 430,000 bpd in June, creating market anxiety for oversupply, according to the IEA.
• U.S. President Trump has indicated new tariffs on the EU and Mexico, which may cap global oil demand and increase market uncertainty.
• Projected new sanctions could make global oil supply tighter, placing short-term volatility on prices.
• Better Chinese export and import data could temper support to oil prices, considering China’s status as the world’s largest crude importer.
WTI crude fell below $67.50 per barrel as growing supply concerns and revived trade tensions dragged down market sentiment. The International Energy Agency (IEA) said Saudi Arabia overshot its June output target by 430,000 barrels per day, fueling oversupply fears even as the kingdom stated it was sticking to OPEC+ commitments. Concurrently, rising U.S. tariff actions, such as additional tariffs on EU and Mexican imports, fueled worries of a softening in global oil demand. Although better-than-expected Chinese trade figures provided some support, the overall picture is unclear with traders looking for developments, especially on prospective U.S. sanctions against Russian oil.
WTI crude oil dropped below $67.50 as increasing Saudi output and fresh U.S. tariff tensions kept pressure on prices. Traders are wary with expectations of new U.S. sanctions against Russia, while better Chinese trade data provides limited support.
• WTI crude oil dropped below $67.50 during Asian sessions after increasing more than 2.5% in the last session.
• Saudi Arabia surpassed its OPEC+ production target by 430,000 barrels per day in June to 9.8 million bpd.
• IEA report evokes concerns of oversupply, notwithstanding Saudi Arabia’s insistence of sticking to its voluntary production cut quota.
• U.S. President Trump imposed a 30% tariff on EU and Mexico imports from August 1, ratcheting up trade tensions.
• Imposed tariff rate increases to 15%-20% from the existing 10% would potentially affect international oil demand.
• China trade statistics improved, with exports up 7.2% and imports up 2.3% YoY in June.
• Markets look forward to possible new U.S. sanctions against Russia, which can affect international oil supply and price.
The recent decline in WTI crude oil prices represents a combination of geopolitical and supply-side events influencing global energy market conditions. Saudi Arabia’s oil production is among the main drivers, as it apparently overproduced its OPEC+ quota last month, fueling fears of accelerating global supply. While Saudi officials insisted that they met their voluntary target, the market reaction has been cautious. This has compounded prevailing worry regarding world oil balances, particularly at a time when uncertainty surrounding demand hangs in the balance amid wider economic pressures.
WTI CRUDE OIL DAILY PRICE CHART
SOURCE: TradingView
In the meantime, tensions in trade keep rising, with U.S. President Donald Trump’s announcement of a 30% tariff on Mexican and EU imports, effective August 1. He also suggested raising blanket tariffs on other trading partners to 15%-20%, and economic stress fears are increasing. This might take a toll on global trade flows and manufacturing production, and then indirectly on energy consumption. But enhanced trade figures from China, the world’s largest oil importer, presents a silver lining and indicates islands of strength in the world economy.
TECHNICAL ANALYSIS
WTI crude oil tested resistance around $69.50 before dropping below $67.50, which represents a short-term bearish reversal. The price also could not hold above the 50-day moving average, which means deteriorating bullish momentum. Level support is currently visible in the region of $66.80–$68.50, and a break below this level may lead to further declines towards $65.20. Supportively, short-term resistance is in the area of $68.20, and a significant breakout above this level can lead to a retest of the $69.50–$70.00 zone. Momentum oscillators such as RSI and MACD are indicating consolidation, reflecting a guarded market sentiment.
FORECAST
If geopolitical tensions spike—especially with possible U.S. sanctions on Russian oil exports—WTI prices might experience fresh upside pressure. Any supply disruptions from major producers, coupled with consistent demand from major buyers such as China, might assist in propelling prices back to the $69.50–$70.00 resistance level. Favorable news in global trade talks, particularly if the EU and U.S. agree, might improve overall sentiment and assist in a recovery in oil prices.
Downside risks, however, include persistent overproduction from Saudi Arabia or other OPEC+ nations that would further raise the threat of oversupply and keep WTI prices weighed down. Moreover, if global trade tensions further escalate—especially with the imposition of wider U.S. tariffs—anxiety about a decline in global economic activity could dampen oil demand. In such circumstances, WTI may fall towards the $66.00 or even $65.00 support levels in the near term.
