Crude Oil Outlook: WTI Crude Faces the $65 Zone

Over the past three trading sessions, WTI crude oil has posted a decline of more than 4%, falling below the $65 level and reinforcing a new short-term bearish bias. Selling pressure on crude has remained strong as investors digest recent OPEC+ reports and uncertainty continues to grow around the renewed escalation of the trade war. If these factors persist, we may see more sustained downward pressure on oil price movements in the near term.

What has OPEC+ said?

In its latest reports, OPEC+ indicated that the global economy could perform better than expected in the second half of 2025, with countries like India, China, and Brazil exceeding growth forecasts. However, while this outlook suggests stronger demand, the organization also confirmed its decision to gradually increase oil production, with an additional 548,000 barrels per day set to begin in August, as announced on July 5.

This increase is already reflected in the latest data. In June, OPEC+ reached a production level of 41.56 million barrels per day, representing a monthly rise of 349,000 barrels compared to May. Most member countries increased their output, with Saudi Arabia standing out, lifting its production from 9.05 million to 9.3 million barrels per day. This confirms OPEC's intention to shift toward a higher-output environment, a trend likely to intensify over the coming months.

Source: MacroMicro

This new production landscape, now driven not only by the U.S. but also by OPEC, has sparked concerns about a potential supply-demand imbalance. If demand fails to rise as expected, the market could face a supply glut, flooding inventories with excess crude. A significant accumulation of available barrels could further increase selling pressure on WTI crude in the weeks ahead.

 

Is the trade war affecting oil markets?

Recent statements from the White House have raised expectations of a global economic slowdown, which could impact dozens of countries if no concrete agreements are reached. Among the latest developments in the trade war, a new 30% tariff has been imposed on regions such as the European Union and Mexico. Meanwhile, the EU is already preparing retaliatory measures against the U.S., which could fuel even more economic uncertainty if tensions continue escalating.

In terms of market confidence, some sentiment indicators are showing signs of strain, particularly due to uncertainty over how a more aggressive trade conflict might impact crude demand in the coming months. As of now, the MM Sentiment Indicator, which gauges investor sentiment in the oil market, shows pessimism rising to 50.44%, while optimism has fallen to just 7.96% in recent sessions.

Source: MacroMicro

As pessimistic sentiment continues to rise across oil market indicators, it’s becoming increasingly clear that the latest phase of the trade war is starting to shape expectations for crude prices. If this uncertainty persists, we could see even stronger downward pressure on WTI in the short term.

 

WTI Technical Outlook

Source: StoneX, Tradingview

• Broken trendline: Since early May 2025, WTI had attempted to sustain a steady uptrend, despite recent volatility. However, the latest sessions have seen a notable rise in selling pressure, breaking the ascending trendline that had remained in place. If this pressure continues, it could trigger a new short-term bearish pattern in price movements.
• RSI: The Relative Strength Index has started to slope downward and is currently oscillating below the neutral 50 level. This suggests that bearish momentum is gaining strength, and if this trajectory holds, it could signal increased selling dominance in the short term.
• TRIX: A similar pattern can be seen in the TRIX indicator, which is now sloping downward. This shift implies that the average strength of the moving averages is entering bearish territory, and if the negative slope continues, it could indicate a shift in momentum toward sellers.

 

Key Levels:

• $68 – Major Resistance: This level coincides with the 200-period simple moving average. If bullish price action reaches this area again, it could reactivate the dormant bullish bias seen in previous sessions.
• $65 – Nearby Support: This level aligns with the 50-period simple moving average. Continued price action below this point could confirm the emergence of a relevant bearish bias.
• $63 – Critical Support: This area marks a neutral zone observed during April and May and now stands as the most important support level. A downward break below this line could signal the start of a more sustained bearish trend.

Written by Julian Pineda, CFA – Market Analyst
Follow him: @julianpineda25