WTI Oil Advances as 200-day MA Serves as Support, Chinese Imports Soar

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Oil prices advanced this morning following a bullish close on Friday. It appears that the fears market participants had in regards to a recession may be waning and this has helped Oil prices.

Economists now predict better growth, more jobs, a lower chance of a recession, and slower inflation compared to three months ago, according to The Wall Street Journal's quarterly survey. On average, economists see a 33% chance of a recession in the next year, down from 45% in April but higher than 22% in January.

OPEC + Projects Strong Q3 Demand

Another reason oil prices could be on the up this morning comes from OPEC +. Russia's RIA news agency quoted Haitham Al Ghais on Monday as telling journalists on the sidelines of last week's OPEC seminar in Vienna that the organization expects oil demand to grow by 1.3 million barrels per day in 2025, driven by a strong global economy.

Al Ghais said there is strong demand growth, especially in the third quarter, and good demand growth in the fourth quarter, with tight supply-demand balances. This is why the group of eight countries is increasing oil production, according to the report.

OPEC and its allies are increasing oil production and expect strong demand in the third quarter, with a tight balance between supply and demand in the coming months. According to five sources who spoke to Reuters, OPEC+ plans to approve another large increase in oil production for September, as reported by Reuters.

Chinese Crude Imports Soar

China's crude oil imports bounced back in June, hitting their highest daily rate since August 2023. This happened as refineries increased production and imports from Saudi Arabia and Iran grew, according to consultancies.

China, the world's largest oil buyer, imported 49.89 million metric tons of oil in June, equal to 12.14 million barrels per day, based on data from the General Administration of Customs. This was a 7.1% increase from May's 46.6 million tons and 7.4% higher than the same time last year.

Kpler reported that imports from Saudi Arabia rose by 845,000 barrels per day to 1.78 million barrels per day, as lower prices encouraged Chinese refiners to buy more oil.

China's crude oil stocks also grew by 82 million barrels in the second quarter of 2025, according to the International Energy Agency (IEA).

New policies in China are making oil companies long-term storage partners for the government, keeping these stocks out of the global market, the IEA said. The agency also noted that Chinese companies are expected to keep building up oil inventories, which will play a key role in balancing the market in the coming months.

The fact that China will continue building its oil inventories bodes well for Oil prices and could keep prices supported.

Looking Ahead - Potential Sanctions on Russia to Aid Oil Prices?

US President Donald Trump announced on Sunday that he will send Patriot air defense missiles to Ukraine. He is also set to make a "major statement" about Russia on Monday, expressing frustration with President Vladimir Putin over the lack of progress in ending the war in Ukraine.

To push Russia into serious peace talks with Ukraine, a bipartisan US bill proposing new sanctions on Russia gained support in Congress last week.

Meanwhile, European Union envoys are close to finalizing their 18th round of sanctions against Russia. This package is expected to include a lower price cap on Russian oil, according to four EU sources after a Sunday meeting.

Sanctions have thus far failed to dent Russian oil exports, will this package prove any different? It will be interesting to hear from President Trump and gauge if market participants react to any statement made.

Any sign that Russian exports may be affected could see a spike in Oil prices, however given the flip-flopping we have seen from the Trump administration, markets may ignore the announcement.

Technical Analysis - WTI

From a technical analysis standpoint, Oil prices bounced off the ascending trendline on Friday.

The daily candle closed as a bullish engulfing and has broken above the 200-day MA. We saw a retest of the 200-day MA this morning before oil prices moved higher once more.

For now bulls remain firmly in control with a daily candle close below the swing low at 66.81.

Immediate resistance rests at 71.38 with a break above facing resistance at 73.20 and the psychological 75.00 handle.

Support may be found at the 200-day MA which rests at 68.47 before the all-important swing low at 66.81.

WTI Oil Daily Chart, July 14, 2025

Source: TradingView (click to enlarge)

Client Sentiment Data

Looking at OANDA client sentiment data and market participants are long on WTI with 73% of traders net-long. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are long means WTI prices could decline in the near-term.

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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