West Texas Intermediate (WTI) crude oil is currently priced at around $62, showing signs of recovery after a dip. It found support at the $55 level, which is forming a potential double-bottom pattern on the daily chart. However, macroeconomic and geopolitical factors, like increased output from OPEC+ and the possibility of Iran bringing oil back to the market, still affect market sentiment.

OPEC+ Production Risks

OPEC+ has decided to boost production, which brings risks to the oil market. Key players like Saudi Arabia are hesitant to reduce output, warning that the voluntary cuts of 2.2 million barrels per day (bpd) may end by Q4 2025 unless members stick to their quotas. Additionally, discussions about a nuclear deal between the United States and Iran are limiting the rise in oil prices. Analysts expect this deal could potentially add 800,000 bpd of Iranian oil supply, putting more pressure on the market. WTI continues to stay above $60 and is defending its $55 support level, the lowest it has been since 2021. The price has surpassed the 21-day Exponential Moving Average (EMA) at $61.29, which indicates a short-term positive trend. The Relative Strength Index (RSI) is at 50.70, and the MACD histogram suggests a positive recovery, even though challenges still exist near the $65 resistance. Future movements will depend on updates regarding Iran, OPEC+ policies, and broader economic data. At about $62 and bouncing back from $55, WTI crude’s current status opens up several technical and fundamental discussions. The $55 support seems to be forming a “double-bottom,” typically seen as a reversal area or a last defense for buyers. This pattern often indicates the end of selling pressure, suggesting we may have experienced the worst of the downturn, at least for now. WTI has risen above its 21-day EMA and is hovering near $61.29, indicating a slight short-term upward trend. However, this technical strength brings some uncertainties. The RSI at 50.70 shows a neutral stance, meaning there’s room for movement in either direction. The MACD histogram showing positive momentum supports short-term strength, but caution is warranted as long as prices stay below $65. Testing this resistance will reveal how strong the buyers truly are.

Supply and Demand Tug of War

Looking at the bigger picture, we see a competition between expected supply increases and technical demand signals. With OPEC+ increasing output, especially amid unreliable coordination among members, there’s uncertainty about the sustainability of production cuts. Saudi Arabia’s willingness to end voluntary cuts without improved compliance raises concerns about future unity in the group. Adding to the situation is the possible return of Iranian oil—up to 800,000 bpd if negotiations succeed. This means more oil may flood the market while demand remains unchanged. Iran’s ability to quickly ramp up production could exceed current support levels unless other producers choose to cut back. From a trading perspective, our immediate focus is on the strength of the $60–$55 support range. If this area holds despite the growing supply threats, we could see prices forming a base that invites more traders to test resistance levels above $65. Monitoring trading volume and intraday volatility will be critical—if bullish activity strengthens near $63–$64, it could create pressure on short positions. We must stay updated on announcements from international organizations and policy changes—not only from oil-exporting countries but also central banks globally. Special attention should be given to inflation and GDP updates from major economies like the US and China, as they will significantly influence market positioning leading up to key expiry cycles. Looking ahead, monitoring gamma positioning and skew flattening is important, especially as prices near levels where options dealers may need to adjust their strategies. Increasing open interest in calls around $65 signals preparations for a possible price breakout, while renewed put activity below $60 may indicate bearish sentiment gaining strength. We remain vigilant for any shifts from Vienna or Washington that could alter market direction. Price movements close to major announcements or unexpected diplomatic events may cause volatility spikes, so it’s essential to have clear levels, strict risk management, and scenario planning in place before trading. Create your live VT Markets account and start trading now.

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