WTI Crude Oil is trading in a narrow range as it stabilizes after a recent dip due to the Iran-Israel ceasefire. Prices have dropped from earlier highs but are still above $64 per barrel, currently sitting around $64.50, marking a 0.90% increase during U.S. trading hours. Market movement is affected by last week’s report from the U.S. Energy Information Administration (EIA), which revealed a smaller-than-expected decrease of 3.5 million barrels in inventories. Traders are now waiting for new EIA data and the OPEC+ meeting on July 6 to better understand future oil price trends.

Impact Of Inventory Reports

Data from the American Petroleum Institute indicated an unexpected rise of 680,000 barrels in U.S. inventories, contrasting with usual summer fuel demand. The upcoming OPEC+ meeting is significant as it will outline production strategies, including plans to increase output by 411,000 barrels per day in August. In China, the Caixin Manufacturing PMI rose to 50.4 in June, suggesting that factory activity is increasing, which could boost oil demand. On the other hand, U.S. employment data showed a decline, with the ADP report revealing a loss of 33,000 jobs in June. Investors are now awaiting the U.S. Nonfarm Payrolls report for more insights into the job market. With prices steady above $64 per barrel, WTI Crude Oil seems to be in a holding pattern. There is moderate buying interest, though the market lacks a clear direction. The recent price increase—just under 1%—indicates some demand still exists, but overall confidence appears weak. The market is cautiously optimistic, shaped by changing supply expectations and mixed demand signals. Last week’s EIA data response was muted. The 3.5 million barrel draw did not meet expectations, making it difficult for prices to rise higher, even with key technical levels intact. This kind of inventory report is not impactful—it’s neither weak enough to raise alarms nor strong enough to spark a rally. For those analyzing crude contracts, these minor surprises create uncertainties and lead to shorter holding periods due to fading confidence.

OPEC+ Meeting Considerations

Attention is now focused on the OPEC+ meeting on July 6. There is speculation about a possible output increase of over 400,000 barrels per day in August. If this happens, it could pressure medium-term prices, especially if global demand does not keep up. While previous actions aimed to maintain balance, this move could add tension to an already unstable market. We may need to adjust our strategies to account for a higher supply in the upcoming quarter. The unexpected 680,000-barrel build reported by the American Petroleum Institute adds another layer of uncertainty. Typically, we’d expect inventory draws during this busy time for fuel demand, but that hasn’t happened, prompting a reassessment of seasonal expectations. There are notable discrepancies between expected and actual consumption, increasing short-term price risks. This emphasizes the need for careful exposure management, especially as markets diverge from historical patterns. On a positive note, data from China provides some support. The Caixin Manufacturing PMI’s slight rise above 50 indicates a small recovery in industrial activity. More factory activity usually means higher energy consumption, which can help boost prices. But given the small margin of the increase, we should be cautious about assuming a significant rise in demand. If Chinese manufacturing continues to recover into the next quarter, it might encourage more positive hedging strategies, but it’s too soon to claim that shift. Conversely, the U.S. labor market is showing signs of strain. The reported loss of 33,000 jobs highlights weakening economic momentum. If the Nonfarm Payrolls report confirms this trend, it could lead to lower consumer demand, which would impact domestic energy consumption and challenge previous assumptions made in futures spreads. For those involved in short-term strategies, this shift could create opportunities but requires careful monitoring due to tight margins. As the market processes this information, we are adjusting our expectations. There is no single clear narrative; instead, we see a mix of slower economic activity, reduced speculation, supply-side adjustments, and inconsistent demand recovery. Our approach must remain flexible, ready to respond to emerging strengths and manage potential downsides with protective measures, especially as data continues to surprise. In this environment, position sizing, stop-loss triggers, and entry flexibility are crucial, as typical pricing indicators may not align. It’s essential to stay engaged, maintain short time horizons, and accurately assess risk to find our competitive edge. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now