Oil Price Outlook: WTI (CL=F) and Brent (BZ=F) Under Pressure From Geopolitics and Supply Risks

Crude oil markets remain volatile as WTI (CL=F) trades at $64.01, down 0.91%, and Brent (BZ=F) holds near $67.48, lower by 0.74%, reflecting the tug of war between strong U.S. supply, escalating geopolitical conflicts, and shifting demand flows from Asia and Europe. Despite steady demand, the equilibrium has been challenged by Russia-Ukraine tensions, tariff pressures, and heavy investment in renewables, while speculative flows continue to dictate weekly swings.

Geopolitical Risk Premium Returns to Oil (CL=F, BZ=F)

The war in Ukraine has reintroduced a meaningful geopolitical premium into both WTI and Brent benchmarks. Ukrainian drone strikes on Russia’s energy infrastructure hit eight refineries in August, cutting roughly 10% of refining capacity, and temporarily disrupting flows through the Druzhba pipeline, which supplies Hungary and Slovakia. Over the weekend, a strike at Russia’s Baltic export port near St. Petersburg added to concerns. Russia, already struggling with seaborne oil shipments that hit a six-month low, now faces possible gasoline shortages at home, prompting the Kremlin to consider extending its export ban. Each incremental attack further tightens global supply expectations, making the $65–$70 per barrel range highly sensitive to further escalations. Analysts warn that each 500,000 barrels removed from Russian exports could shift Brent toward $75–$78 in a matter of weeks.

OPEC+ Strategy and Saudi Revenue Decline

Saudi Arabia’s Q2 oil export value fell 16% YoY, reflecting weaker pricing and pressure from record U.S. output. The Kingdom continues to balance fiscal needs with OPEC+ strategy, wary of pushing cuts too aggressively as it weighs competition with U.S. shale. The OPEC basket price sits at $69.65, marginally lower, suggesting member states are absorbing reduced revenues amid discounting to key buyers in Asia. India has ramped up U.S. crude imports as prices remain favorable, while still taking Russian barrels despite tariffs. Saudi Arabia, meanwhile, faces a delicate fiscal situation, with breakeven budgets requiring oil closer to $80–85. This mismatch between current Brent levels at $67–68 and fiscal needs could force further production adjustments heading into Q4.

U.S. Supply Surges and EIA Record Data

According to the EIA, U.S. crude production hit a record in 2024, though growth has slowed compared to earlier years. Weekly output in June beat estimates, reinforcing America’s role as the swing producer. WTI’s rangebound action between $62.70 and $64.95 last week showed how resilient U.S. supply is at these levels. Even with strong exports to India and Europe, domestic production ensures no acute shortage is forming. Inventories, however, have drawn sharply, which, combined with a weaker dollar and speculation about Fed rate cuts, has kept a floor under WTI. Traders point to the $62.30–$65.20 speculative range as defining the short-term technical setup, with upside capped near $66 absent new geopolitical shocks.

European and Asian Demand Shifts

Europe is leaning more heavily on jet fuel imports from Asia, reaching record highs, while refining disruptions in California and ongoing Norwegian pipeline maintenance have added regional volatility. India’s refiners have expanded U.S. purchases, while also increasing discounted Russian crude despite tariff threats. China remains opportunistic, but its slowing industrial profits—down 1.7% in July—weigh on long-term demand growth. Still, Asia’s appetite remains strong enough to soak up discounted cargoes, preventing a steeper collapse in Brent. On the flip side, Chinese LNG imports have declined, reflecting a broader recalibration of its energy mix toward renewables and storage investments, leaving oil markets more sensitive to temporary demand shocks rather than structural growth.

Technical Outlook for WTI (CL=F) and Brent (BZ=F)

WTI struggled to sustain gains above $64.40 last week, reversing lower into the weekend and signaling exhaustion. The inability to clear the $65–$66 resistance highlights bearish undertones, even as speculative flows support short-term rallies. On the downside, $63.00 to $62.50 represents immediate support, with risks of a deeper slide toward $61.70 if macro sentiment worsens. Brent faces a similar picture, with resistance at $68.50–$69.20 and downside support at $66.00. A decisive break below these levels would invite a sharper selloff toward $63 for Brent, narrowing the spread to WTI. The technical picture suggests rangebound trading but with clear downside vulnerability unless geopolitical shocks intensify.

Investor Positioning and Sentiment

Speculative positioning in crude remains cautious, with traders unwilling to bid aggressively higher given ample U.S. supply and weak macro data from China. Large players are expected to return after the holiday weekend with volumes, but the overhang of geopolitical risk prevents aggressive shorting. Goldman Sachs projects oil falling below $55 in 2026, a reminder that current rallies may be short-lived unless backed by sustained supply disruptions. At present, crude appears in a fragile balance between bearish fundamentals and bullish geopolitical shocks, leaving sentiment prone to quick reversals.

Verdict: Buy, Sell, or Hold on Oil (CL=F, BZ=F)

At $64 for WTI and $67 for Brent, oil is trading below the fiscal comfort levels of OPEC producers, with downside risks capped by geopolitical events in Russia and Ukraine. Fundamentals lean bearish with U.S. output at record highs and Chinese demand still fragile, but the geopolitical premium is back in play and could lift prices $5–10 above current ranges if attacks intensify. The technical picture argues for consolidation, but the risk-reward skews cautiously bullish given supply risks. Based on the current setup, WTI (CL=F) is a speculative Buy on dips near $62, while Brent (BZ=F) is a Hold, with a breakout above $70 required to confirm renewed momentum.

That’s TradingNEWS

WTI Crude Oil (CL=F) and Brent (BZ=F) Test Key Technical Levels

Oil markets began the week with WTI crude climbing 0.94% to $64.61 per barrel and Brent crude advancing 0.99% to $68.15. The rally coincides with thin U.S. holiday trading volumes but sits directly on the 50-day moving averages, a technical battleground where bulls and bears are both positioned aggressively. For WTI, $65 is the immediate pivot. A sustained move above opens the path toward $67, while repeated failures leave the market locked in the noisy consolidation that has defined the past two weeks. Brent shows a similar setup, with $67 serving as initial support and $70 the psychological target just beneath its 200-day moving average. Both benchmarks are range-bound, offering short-term trading windows rather than long-lasting trends, yet the balance may shift quickly as fundamental shocks mount.

India’s Strategic Russian Oil Imports Reshape Global Trade

Despite U.S. tariffs escalating to 50% on Indian goods, aimed at punishing New Delhi for its continued Russian crude purchases, India shows no signs of backing down. Data confirms that Russia accounted for 31.4% of Indian oil imports in July, well above Iraq at 17.1% and Saudi Arabia at 16.1%. The value of Russian barrels entering India reached $3.6 billion, versus around $2 billion for Iraqi and Saudi volumes. Indian refiners are still importing more than 1.5 million barrels per day of Russian crude, a scale too large to replace quickly. For Washington, the dilemma is clear: squeezing India risks lifting global oil above $100 and reigniting U.S. inflation, yet stepping back exposes the limits of Western sanctions. China is already absorbing additional Russian barrels, and its ability to undercut sanctions further strengthens BRICS alignment. Oil prices remain hostage to these geopolitical calculations, where barrels are traded as much for political leverage as for supply and demand balance.

Saudi Arabia and Iraq Halt Shipments to Sanctioned Indian Buyer

Fresh tension emerged after Saudi Arabia and Iraq suspended shipments to an Indian refiner targeted by sanctions, underscoring how energy flows are increasingly politicized. While volumes remain modest compared to Russian supply, the move highlights that even Middle Eastern producers are not immune to Western pressure. Markets are weighing whether this suspension is symbolic or the start of a broader realignment. Should Indian refiners lean further on Russia to compensate, Moscow’s influence will strengthen, while Middle Eastern producers may quietly redirect barrels to Europe and China. That shift would alter tanker routes, insurance exposure, and freight costs, feeding volatility into already fragile oil pricing structures.

OPEC+ Production Trends and the Threat of Oversupply

The U.S. Energy Information Administration projects Brent crude to average $58 per barrel in Q4 2025, with WTI near $59.65. The bearish outlook reflects OPEC+ gradually unwinding production cuts and higher output from South America, tipping balances into oversupply. Wall Street banks echo this sentiment, with Goldman Sachs, JPMorgan, and Morgan Stanley collectively forecasting Brent in the low $60s for early 2026. For U.S. shale, the implications are severe. Breakeven levels for new wells hover just above $60, and if WTI dips beneath this threshold, rig counts and frac crews will contract further. Rig activity is already declining, though efficiency gains mask the immediate impact on output. A glut-driven slump below $60 would force the shale patch into another round of capex cuts, deepening the cycle of volatility.

Petronas Struggles Under Weak Pricing and Domestic Output Decline

Malaysia’s Petronas posted a 24% revenue decline and a 19% drop in after-tax profit in H1 2025, weighed down by weaker benchmark oil prices, foreign exchange pressures, and divestments. Production slipped 3.2% year-on-year to 2.403 million boepd, down from 2.482 million boepd. Domestic gas production and international liquid output were both lower. The company announced plans to trim its workforce by 10% to weather what it called “increasingly daunting headwinds.” Petronas expects subdued pricing conditions to persist, citing geopolitical tensions, macroeconomic uncertainties, and OPEC+’s unwinding of cuts. For global traders, these results confirm how weaker benchmarks filter through to national oil companies, forcing structural adjustments. Petronas’ challenges illustrate broader struggles among producers caught between sluggish demand recovery and rising geopolitical risk.

Geopolitical Flashpoints Add to the Risk Premium

Attacks on Russian refineries, drone strikes on South Sudanese flows, and Houthi missile claims against Red Sea tankers all remind investors that geopolitical risks are never far from the surface. Supply disruptions remain sporadic, but each incident reintroduces a risk premium that traders must price in. Europe is simultaneously importing record jet fuel volumes from Asia, underscoring how the supply chain remains fractured. These shifts in refined product flows ripple back into crude benchmarks, complicating demand forecasts. Markets are also watching the East Africa pipeline project and Congo offshore developments, both of which could modestly alter medium-term balances if they achieve scale. But near-term price action is more about political flashpoints than new supply coming online.

Technical Signals Point to Heavy Resistance Overhead

From a chart perspective, both WTI and Brent are wrestling with their 50-day moving averages. For WTI, holding above $65 is crucial, as a break could push quickly to $67 and then $70. Failure here risks another slide toward $62, where prior demand has emerged. Brent’s test at $68.15 sits in a congested band, with upside capped by $70–$71 and downside limited at $66. Momentum oscillators show neutral-to-weak bias, reflecting the indecision. The U.S. Dollar Index, trading around 97.70 after four straight declines, provides temporary support, as a weaker dollar typically boosts oil. But structural oversupply fears remain dominant, with technicals likely to follow fundamentals rather than dictate them.

Final Market Positioning: Buy, Sell, or Hold

With WTI crude (CL=F) at $64.61 and Brent (BZ=F) at $68.15, traders face a market torn between short-term bullish catalysts and looming oversupply. On the bullish side, geopolitical risks, U.S. dollar softness, and India’s defiance on Russian barrels inject strength. On the bearish side, EIA’s projection of Brent at $58 and WTI at $59 in early 2026, coupled with Wall Street consensus in the low $60s, casts a heavy shadow. For now, oil is a hold—attractive for tactical long positions into $67–$70 resistance but dangerous for long-term accumulation given looming supply. The next decisive move will hinge on OPEC+ policy, U.S. shale reaction, and whether geopolitical sparks ignite sustained disruption rather than sporadic risk premiums.

That’s TradingNEWS

• Gold price jumps to near $3,550 amid meltdown in bonds globally.
• Rising bonds yields indicate mounting fiscal concerns.
• Investors await key US JOLTS Job Openings data for July.

Gold price (XAU/USD) extends its winning streak for the seventh trading day on Wednesday. The precious metal posts a fresh all-time high near $3,550 as investors have dumped long-dated government bonds across the globe.

Lower yields on interest-bearing assets increase demand for non-yielding assets, such as Gold.

Surging government bond yields signify mounting concerns over government fiscal debt, which often lead to a decline in welfare spending, and henceforth increases appeal of safe-haven bets.

Another reason behind strength in the Gold price is firm expectations that the Federal Reserve (Fed) will cut interest rates in the policy meeting this month. According to the CME FedWatch tool, there is an almost 92% chance that the Fed will cut interest rates in the September policy meeting.

Lower interest rates by the Fed bode well for non-yielding assets, such as Gold.

Lately, Federal Open Market Committee (FOMC) members supported interest rate cuts amid escalating downside employment risks.

Meanwhile, investors await United States (US) JOLTS Job Openings data for July, which will be published at 14:00 GMT. Investors will pay close attention to the job data to get cues about the current status of the labor demand.

US employers are expected to have posted fresh 7.4 million jobs, almost in line with the prior reading of 7.44 million.

Gold technical analysis

Gold price trades in uncharted territory after a breakout of the Symmetrical Triangle formation on a daily timeframe. A breakout of the above-mentioned chart pattern often leads to high volume and wider ticks on the upside.

Rising 20-day Exponential Moving Average (EMA) around $3,410 indicates that the near-term trend is bullish.

The 14-day Relative Strength Index (RSI) jumps to near 75.00. A corrective move in the Gold price looks likely as the momentum oscillator turns overbought.

Looking down, the 20-day will act as key support for the major. On the upside, the round figure of $3,600 would be the key hurdle for the pair.

Gold daily chart

Despite the neediness of the CADCHF to the positive momentum in the last period, but it its positive stability above the support at 0.5780 supports the chances of activating the suggested bullish correctional attempts, to fluctuate near 0.5830.

By the above image, we notice stochastic attempt to provide positive momentum by its stability above 20 level, to increase the chances for targeting the positive stations by its rally towards 0.5910, surpassing it might succeed in renewing the pressure on the barrier at 0.6020 level.

The expected trading range for today is between 0.5800 and 0.5910

Trend forecast: Bullish