Oil Prices Slip as Supply Outlook Weighs on Market

Brent and WTI crude prices have declined over the past two days, reflecting a market that remains under pressure from rising supply expectations and easing geopolitical risks.

As of early July 1, Brent trades at $65.53 per barrel and WTI at $62.68 per barrel. On June 29, Brent stood at $67.77 and WTI at $65.52. By June 30, Brent had dropped to $66.40 and WTI to $64.76.

This marks a clear downward move of more than $2 per barrel for both benchmarks in just 48 hours. Official price data and trading charts confirm that the market’s focus has shifted from earlier conflict-driven volatility to fundamentals.

OPEC+ is set to increase production by 411,000 barrels per day in August, continuing a series of monthly hikes. This decision, widely anticipated by traders, has added to the bearish sentiment, as supply is poised to outpace demand growth.

The easing of Middle East tensions, particularly the ceasefire between Iran and Israel, has further reduced the risk premium that had supported prices earlier in June.

Technical analysis of the daily and four-hour charts for both Brent and WTI supports the current weakness. Both benchmarks trade below their 50-, 100-, and 200-period moving averages, which all act as resistance.

The Relative Strength Index (RSI) on the four-hour charts is below 40 for both Brent and WTI, indicating that the market is in oversold territory but not yet signaling a reversal.

The Moving Average Convergence Divergence (MACD) remains negative, with the signal line below zero and the histogram showing persistent bearish momentum.

Bollinger Bands have narrowed, reflecting reduced volatility after the recent steep decline, and prices are hugging the lower band, which often signals continued weakness or consolidation.

Volume analysis shows that selling pressure has increased, with higher volumes on down days and lighter activity on rebounds. This suggests that buyers remain cautious and that the recent price floor may not hold if supply continues to rise.

The market’s attention now turns to the OPEC+ meeting scheduled for July 6, where further production guidance will be provided. Macroeconomic factors also play a role.

U.S. oil rig counts fell to their lowest since October 2021, but this has not offset the impact of higher OPEC+ output and steady U.S. inventory levels. Demand concerns persist amid ongoing trade tensions and uncertainty about global economic growth.

In summary, the oil market has moved lower since June 29, with both Brent and WTI down more than $2 per barrel. The combination of rising supply, easing geopolitical risks, and weak technical indicators suggests that further downside remains possible unless new bullish factors emerge.

Traders continue to watch for signals from OPEC+ and macroeconomic data to gauge the next move.

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