WTI Stuck in the Middle: OPEC, Trade & Tensions Ahead

WTI Crude Oil Futures (August Futures)

Friday’s Settlement: 65.52, up +0.28 [+0.43%] for the day, down -8.32 [-11.27%]

Last Friday, futures started the session with a rally back towards the key 66.00 resistance level. Around 10am cst, Bloomberg released an article talking about outsized OPEC+ output hikes which drove futures off the highs. As we noted in Friday morning’s report, we expected these types of articles to start next week with the OPEC meeting scheduled for the 7th.

The rhetoric, centered around another +411k bpd output hike, is easy to paint as bearish when looking for clicks. But, this level of hike has largely been expected by markets and oil traders for some time. In our view, the risk into the OPEC meeting is chatter of an output hike lower than +411k bpd (in our opinion).

Later on Friday, President Trump ended trade negotiations with Canada, which surprised markets. This headline drove Crude higher and equities lower on the day. If trade relations with Canada continue to sour, it could become a bullish catalyst for WTI futures as Canadian crude flows will likely be slowed.

Last week’s price action following US strikes on Iran was brutal. While the direct conflict between Iran and Israel seems to have been wrapped up, don’t be surprised if flare-ups in tensions pop up moving forward.

Today, futures are higher by -0.18 [-0.26%] to 65.36

This week features a packed calendar of data releases and deadlines. With OPEC+ meeting on July 7th, the “Big Beautiful Bill” deadline being July 4th, and the apparent Trade Deal deadline being July 9th, we’re likely to get a lot of headlines this week that drive crude in either direction.

The macro environment is trading risk-on this morning with equities higher, the Dollar weaker, and treasuries higher.

Data Releases:

N/A

Technical Analysis:

On Friday, both key flat price support/resistance levels held, with 65.00 being support and 66.00 being resistance. Volatility finished the week fairly muted after posting impressive ranges on Monday and Tuesday.

Futures remain above our longer-term pivot pocket, and 64.23*** represents a solid buying opportunity in our view.

For intraday trading, our pivot and point of balance is set at…