Crude oil futures closed at $66.29 per barrel, down $1.04 or 1.54% from the previous session. Prices reached a high of $67.74 and a low of $65.06 during trading. The market briefly surpassed the 200-hour moving average of $67.25. OPEC+ recently announced an increase in crude production, raising concerns about potential oversupply in the global market. However, oil prices bounced back from their session lows, supported by a weaker U.S. dollar and President Trump’s warnings about possibly raising tariffs on India for purchasing Russian crude.

Current Environment and Production Cuts

As of August 4, 2025, crude oil prices are climbing, now hovering around $88 per barrel. This increase follows OPEC+’s decision to maintain its production cuts through the end of the fourth quarter, against market expectations for a slight easing. This situation is reminiscent of past market trends. A few years ago, oil prices were in the mid-$60s, largely influenced by OPEC+ announcements. During that time, geopolitical issues, including tariffs and tensions among major economies, caused sharp price swings. A similar pattern is emerging with new trade tensions between the United States and Brazil over environmental policies affecting commodity exports. Adding to the positive outlook, the latest Energy Information Administration (EIA) report revealed a U.S. crude inventory drop of 4.5 million barrels, which is much larger than the anticipated 2.1 million barrel decrease. This indicates strong current demand that is tightening market conditions. The weaker U.S. dollar, with the DXY index at 101.8, is making oil more affordable for foreign buyers, helping to support prices.

Buying Opportunities and Market Indicators

In this environment, derivative traders should consider price dips as potential buying opportunities. Data from the CFTC shows that money managers are increasing their net-long positions in WTI futures, indicating confidence in rising prices. Strategies like buying call options or establishing bull call spreads on WTI in the coming weeks could be wise for capitalizing on this anticipated upside. Moreover, last week’s manufacturing PMI data from China unexpectedly showed expansion, suggesting that future energy demand from the world’s largest importer may be stronger than expected. We are closely watching market movements, using the 200-hour moving average at $86.50 as a crucial support level. A clear breakout above the recent high of $89.10 could signal the start of a new upward trend. Create your live VT Markets account and start trading now.

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