{"id":116104,"date":"2025-07-10T17:03:55","date_gmt":"2025-07-10T14:03:55","guid":{"rendered":"https:\/\/ironfx-com.wp-dev.int.theitops.net\/?p=116104"},"modified":"2025-07-10T17:04:52","modified_gmt":"2025-07-10T14:04:52","slug":"oil-outlook-oil-stability-under-threat","status":"publish","type":"post","link":"https:\/\/www.ironfxcn.com\/zh\/oil-outlook-oil-stability-under-threat\/","title":{"rendered":"Oil Outlook: Oil stability under threat"},"content":{"rendered":"

Oil prices seem to have stabilised somewhat since our last report <\/a>and in today\u2019s report we are to look mainly at fundamental issues affecting wti prices. We are to discuss the easing of the US oil market, US President Trump\u2019s intentions to apply tariffs but also OPEC+\u2019s oil production intentions. The report is to be concluded with a technical analysis of WTI\u2019s daily chart.\u00a0\u00a0<\/p>\n\n\n\n

Easing of US oil market widens<\/strong><\/h2>\n\n\n\n

Making a start with the data on the ground of the US wti market, we note that last Thursday, Baker Hughes reported a reduction of active oil rigs in the US by seven. It\u2019s notable that it\u2019s the 10\u00a0  <\/sup> weekly drop of the indicator\u2019s reading, in a signal that demand in the US wti market is easing and tends to be a bearish sign for wti prices. <\/p>\n\n\n\n

Furthermore on Tuesday API, despite expected to show a drawdown, showed a wide build up of US wti inventories by 7.1 million barrels underscoring of the slack in the US wti market. Also EIA yesterday, unexpectedly reported an increase of US oil inventories, by 7.010 million barrels, highlighting that aggregated oil production levels surpassed oil demand levels, given that wti imports in the US were reduced by 1.358 million barrels.<\/p>\n\n\n\n

All data\u00a0 tend to highlight the easing of the US wti market, yet we also note that the widening of the easing of the US oil market seems to have intensified which in turn may keep oil bulls in check or even weigh on oil prices. \u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\n

Trump\u2019s trade wars and oil demand<\/strong><\/h2>\n\n\n\n

On a deeper fundamental level, oil traders seem to be less concerned with US President Trump\u2019s tariff intentions than we may have been expecting, yet the issue may continue to threaten the stability of the international oil market. Our interest lies mostly not in the letters already sent out, which have been publicized, but on the tariff letters that are still to be released including Taiwan, India and the EU which have a heavy trading volume with the US. <\/p>\n\n\n\n

Overall we see the case for tariffs to lower trade volume, in turn easing manufacturing activity and consequently may entail an adverse effect for wti demand. It should be noted that China\u2019s manufacturing PMI figures provided mixed\u00a0 signals for June, in a sign of Chinese factories struggling to keep economic activity afloat, while in the US the ISM manufacturing PMI figure for June, despite rising remained below 50, implying that economic activity in the US manufacturing sector is still in contractionary mode. Overall intensification of frictions in international trade relationships could weigh on oil prices and vice versa.<\/p>\n\n\n\n

OPEC\u2019s production levels<\/strong><\/h2>\n\n\n\n

There is a heavy discussion in the international oil market about OPEC+\u2019s production levels. It should be noted that the wti producing alliance, more or less altered its stance over the past months hiking oil production levels albeit somewhat cautiously one could add. It should be noted that according to the latest data, wti production by OPEC members increased in June with the main drivers behind the increase of wti production being Saudi Arabia and UAE. <\/p>\n\n\n\n

Efforts of OPEC seem to be focusing in regaining lost market share and should OPEC\u2019s intentions for an increase of oil production be maintained we may see it weighing on oil prices. Yet there seems to be increasing buzz among oil traders that OPEC members ahead of their online meeting on Saturday, are discussing a pause of the increase of oil production levels from October onwards. <\/p>\n\n\n\n

We also note that OPEC in its latest outlook lowered forecasts for the global oil demand which may add pressure to halt any oil production hikes. \u00a0Should we see market expectations for OPEC pausing oil production hikes intensifying, we may see oil prices getting additional support as the supply side of the international oil market may tighten.<\/p>\n\n\n\n

Oil Technical Analysis<\/strong><\/h2>\n\n\n\n

WTI Cash Daily Chart<\/strong><\/h3>\n\n\n\n
\"Technical<\/figure>\n\n\n\n