WTI and Brent Crude Slide as OPEC+ Supply Surge Overshadows US Inventory Draw

West Texas Intermediate (WTI) crude oil prices dipped on July 16, 2025, falling 0.15% to $65.325 per barrel, while Brent crude oil followed suit, declining 0.26% to $68.60 per barrel. Both benchmarks faced downward pressure despite a larger-than-expected draw in US crude inventories, as rising OPEC+ production and persistent demand concerns dominated market sentiment. WTI traded within a daily range of $64.425 to $65.825, while Brent fluctuated between $67.75 and $69.04, reflecting cautious trading amid mixed fundamental signals.

The Energy Information Administration (EIA) reported a significant 3.859 million barrel reduction in US crude stockpiles, exceeding forecasts of a 1.8 million barrel draw and reversing the previous week’s unexpected 7.07 million barrel build. This tighter US supply outlook initially supported prices, but the bullish signal was overshadowed by reports from the American Petroleum Institute (API) and OPEC+ confirming robust production levels. OPEC+’s plan to increase output by 411,000 barrels per day in recent months, with potential for further increases in August, has intensified oversupply fears, capping gains for both WTI and Brent.

Technically, WTI is testing key support after failing to hold above the 50.0% Fibonacci retracement of $67.08 from the January-April decline. It hovers near the 38.2% Fibonacci retracement at $64.18, supported by the 50-day Simple Moving Average (SMA) at $64.87 and the 100-day SMA at $64.78. Brent, similarly, faces resistance near $69.00 and is approaching support at $67.75, aligning with its 50-day SMA. The Relative Strength Index (RSI) for WTI at 47 and Brent at 46 indicates neutral momentum with a bearish tilt, signaling limited bullish conviction. A break below $64.18 for WTI or $67.75 for Brent could trigger further selling, potentially toward $61.00 and $66.90, respectively, while holding above these levels may keep buyers in play.

Market sentiment remains wary, with rising bearish bets on both WTI and Brent. Reports from the API highlight concerns about oversupply, exacerbated by last week’s 7.1 million barrel inventory build at Cushing. While some analysts suggest geopolitical tensions could spur a rebound, others warn of potential declines to $51–$56 for WTI and $54–$59 for Brent by year-end if demand weakens further. As OPEC+ production plans and global economic uncertainties continue to weigh, the near-term outlook for WTI and Brent hinges on defending critical technical supports in a challenging fundamental environment.