Oil prices broke above their recent trading range; currently, this appears to be an upward correction.
Crude oil gained 3.06% on Wednesday, breaking above its recent trading range in response to stock market gains, strong economic data, potential tariff-related developments, and news of Iran restricting nuclear inspections. Today, crude is trading 0.2% lower, as volatility eases ahead of the long U.S. holiday weekend, despite better-than-expected monthly jobs data.
For oil markets specifically, these developments are worth monitoring:
- OPEC+ is expected to raise output by 411,000 barrels per day this weekend, continuing its gradual reversal of earlier production cuts. This has added to concerns about oversupply amid weak global demand indicators.
- U.S. crude inventories unexpectedly rose by 3.8 million barrels last week, contrary to forecasts for a drawdown. Gasoline stockpiles also surged, suggesting weakening summer fuel demand.
- Geopolitical tensions and tariff risks remain in focus, with Iran's disengagement from the U.N. nuclear watchdog sparking fears of conflict, and the U.S. 90-day tariff pause ending July 9.
Daily Chart: Rebound Following Iran-Related sell-off
On June 23, de-escalation in the Middle East conflict dampened bullish momentum, causing crude oil prices to drop sharply from their local high near the $78 level.
Key support remains around $65, marked by previous local highs. While the market reached its highest level since January last Friday, it failed to break above the early January highs.
Yesterday, oil prices rebounded after breaking out of a tight trading range; however, it currently appears to be just an upward correction.
Conclusion
Crude oil advanced yesterday as investors reacted to several primarily bullish factors. However, the move appears to be just a rebound following the sell-off on June 23. Volatility is likely to decrease ahead of the long holiday weekend in the U.S.\
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil rebounded on Wednesday; today, it’s trading sideways despite stronger economic data.
- The ongoing tariff-related volatility, combined with economic data, is adding to market uncertainty.
The full version of today’s analysis - today’s Oil Trading Alert - is bigger than what you read above, and it includes the current Crude Oil futures contract position. I encourage you to subscribe and read the details today (with a single-time 7-day free trial). Oil Trading Alerts are also a part of our Diamond Package that includes Gold Trading Alerts and Stock Trading Alerts.
And if you’re not yet on our free mailing list, I strongly encourage you to join it - you’ll stay up-to-date with our free analyses that will still put you ahead of 99% of investors that don’t have access to this information. Join our free oil newsletter today.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Recommended for You
- Tax-Optimized Legacy Planning: How Physical Gold IRAs Work in 2025 Learn how forward-thinking investors are protecting generational wealth through tax-advantaged precious metals strategies that function independently of market volatility.
- Volatility Breakout System: Paul's Proprietary Trading Approach Discover how this market-tested trading system has outperformed the S&P 500 by identifying key turning points and generating precise entry signals.