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West Texas Intermediate (WTI) Crude Oil prices hovered near $65.70, down 0.82%, reflecting cautious trading amid U.S. Independence Day market closures. With traders eyeing the OPEC+ meeting on July 5 and the looming July 9 U.S. tariff deadline, WTI remains locked in a tight range. Subdued demand signals and a surprise U.S. inventory build further weigh on sentiment, highlighting the need for coordinated policy actions to stabilize oil markets.
Holiday Trading and Demand Weakness
Thin trading volumes due to the U.S. holiday have kept WTI prices subdued, consolidating within a narrow range after a 0.82% drop. A recent 3.8 million barrel increase in U.S. crude inventories, reported by the Energy Information Administration, coupled with a sharp decline in gasoline demand during the peak summer driving season, signals weakening consumer activity. Global demand forecasts have also been revised downward by the International Energy Agency, projecting a 400,000 barrels per day reduction for 2025, adding pressure on WTI prices and limiting upward momentum.
OPEC+ Supply Decision in Focus
The upcoming July 5 OPEC+ meeting is pivotal, with expectations of a third consecutive monthly production increase of 411,000 barrels per day for August, following similar hikes since May. However, actual output remains below targets due to supply constraints among some member nations. Eased geopolitical tensions, including a recent Iran-Israel ceasefire and Iran’s recommitment to the Nuclear Non-Proliferation Treaty, have reduced supply disruption risks, but the potential for oversupply from OPEC+ hikes could push WTI toward $60 if demand remains soft.
Tariff Threats Add Volatility
The July 9 expiration of a U.S. tariff pause introduces uncertainty, with proposed tariffs ranging from 10% to 70% threatening global trade. These could dampen economic growth, with the International Monetary Fund estimating a 0.5% reduction in global GDP, further weakening oil demand. Recent U.S.-Vietnam trade progress had bolstered market sentiment, but the risk of broader tariffs looms large, keeping traders cautious and contributing to WTI’s consolidation near $65.70.
Path to Market Stability
WTI’s current stagnation near $65 reflects demand concerns and policy uncertainties, with technical indicators showing a critical support zone at $64. Policymakers must clarify tariff plans to avoid demand shocks, while OPEC+ should align output increases with global consumption trends to prevent oversupply. Investors should monitor the July 5 OPEC+ decision, U.S. tariff developments, and upcoming Canadian jobs data on July 11, which could influence demand expectations. Without coordinated action, WTI risks breaking below $64, potentially sliding to $60.45 by late July, undermining market stability.
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