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Oil markets are navigating competing forces this week, with traders balancing fresh OPEC+ supply signals against rising geopolitical tensions and shifting expectations for US rate cuts.
WTI crude rises ahead of OPEC+ output increase
WTI crude futures moved higher as markets evaluated the impact of an upcoming OPEC+ production increase, possible sanctions on Russian oil, and growing expectations of interest rate cuts from the Federal Reserve.
West Texas Intermediate (WTI) crude prices advanced toward $67.50 per barrel on Monday, recovering after an initial sell-off triggered by fresh output plans from the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
The group announced a planned production increase of 547,000 barrels per day starting in September, aiming to regain market share lost over the past year.
However, this additional supply could act as a cap on prices in the near term, particularly as WTI approaches the key $70 resistance level.
A cautious market outlook suggests gains may be limited without stronger demand or further supply disruptions.
US pressure on Russian oil could trigger supply shock
The United States is stepping up diplomatic efforts to discourage India from purchasing Russian crude oil.
This strategic move coincides with President Donald Trump’s stated goal of brokering a Ukraine peace deal by 8 August.
American officials have reportedly warned their Indian counterparts of potential punitive actions, including 100% secondary sanctions targeting any entity that continues to buy Russian oil.
If enforced, these sanctions could jeopardise up to 2.75 million barrels per day of Russian exports — much of which currently flows to China and India.
Such a sharp reduction in global supply could cause prices to spike quickly as traders react to the sudden shortfall.
At the same time, a weaker-than-expected US jobs report for July has raised expectations of Federal Reserve rate cuts. Easing monetary policy would likely stimulate economic activity and boost oil demand.
As a result, expectations of lower interest rates may create a solid price floor, providing support even in the face of increased supply from OPEC+.
Technical analysis: Crude stabilises after sharp drop
The technical picture for WTI crude oil is currently leaning bullish, following a recent sharp decline and rebound.
After falling from above $69.00 on 2 August, prices found solid support at $66.628 — a level that has since triggered a modest recovery.
Picture: WTI crude finds support near $66.63 and begins a recovery, with MACD momentum turning positive, as seen on the VT Markets app.
Crude is now trading near $67.447, showing signs of stabilisation as traders digest the latest OPEC+ supply news and broader macroeconomic factors.
The recovery suggests renewed buying interest, although momentum remains cautious.
Traders should watch for a breakout above immediate resistance at $67.733. A confirmed move higher, particularly with rising volume, could pave the way for a test of the $68.000 level.
Continued bullish divergence in the MACD indicator would further reinforce this positive short-term outlook.
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