After months of range-bound trading, oil prices have broken lower. Brent crude is now trading around $72, and WTI has slipped to $69, raising new questions about demand, supply, and trader positioning heading into the second half of 2025.
This price weakness creates potential setups for traders focused on short-term momentum and macro-driven assets. With key support levels now being tested, this could mark a turning point for sentiment.
What’s Causing the Oil Slide?
Multiple factors are contributing to downward price pressure:
- Muted demand from China despite seasonal consumption
- Robust non-OPEC supply, especially from the U.S. and Brazil
- Mixed economic signals in Europe and emerging markets
- Speculation that OPEC+ may not cut output further without coordination from allies
While geopolitical tensions remain a background factor, the dominant narrative now is oversupply.
Instruments Most Affected
Several oil-linked instruments on Skilling are showing notable moves:
- WTI Crude (Spot/Futures) – Down ~8% over 3 weeks
- Brent Crude (Spot/Futures) – Testing key support below $73
- Equinor ASA – Has pulled back from NOK 320 to NOK 306
- Aker BP, Vår Energi – Showing correlated weakness with crude oil
This dynamic may open potential short-term trade opportunities in equities and energy pairs.
Key Technical Levels to Watch
- WTI: Support at $68.50 – Resistance at $72.00
- Brent: Support at $71.20 – Resistance at $74.50
- Equinor: NOK 300 is the psychological support zone
If these levels break or hold, traders could see directional moves develop quickly.
Macro Drivers Ahead
Several events may influence oil prices this week:
- U.S. Crude Inventory Data (EIA – July 17): A surprise drawdown could stabilize WTI.
- Chinese Import/Refining Stats: Watch for signals on industrial demand and diesel usage.
- OPEC+ Output Commentary: If Saudi Arabia or UAE hint at cuts, prices may rebound.
- US CPI (July 16): Could shift macro sentiment and USD direction, impacting crude.
Trading Strategy Insights
For short-term traders:
- Consider range setups or reversion-to-mean strategies
- Focus on high-beta names like Equinor and WTI
- Use breakout confirmation around key levels
- Adjust risk for potential continued downside momentum
Volatility is rising even as prices decline — that makes this a technically rich environment.
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Broader Market Impact
- NOK pairs (e.g., USD/NOK): May weaken if oil drops further
- Energy ETFs and indices (e.g., OBX Energy): Could decline further on sector sentiment
- Safe havens: Gold and USD tend to benefit during oil market corrections
Conclusion
With WTI below $70 and Brent flirting with $72, oil is entering a price zone not seen since early 2024. This week may offer potential setups for both contrarian and trend-following traders — but careful level monitoring and macro awareness will be critical.
