WTI Oil Slips as 200-day MA Caps Upside Potential

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Oil prices continue to trade in a tight range between the 100 and 200-day MAs. Similar to Gold last week Oil prices appear to be in need of a catalyst that could provide some direction.

EU Sanctions on Russian Oil Exports

On Friday, the European Union approved its 18th round of sanctions against Russia for the war in Ukraine, including measures against India's Nayara Energy, which exports oil products made from Russian crude.

The latest round of European sanctions on Russian oil exports are not expected to have a significant impact on Oil prices. The bigger question which remains is still on the tariff front which continues to keep demand concerns on the minds of market participants and thus hamper upside potential.

Kremlin spokesperson Dmitry Peskov said on Friday that Russia has developed some resistance to Western sanctions.

The EU sanctions came after U.S. President Donald Trump warned last week that he would sanction buyers of Russian exports if Russia doesn’t agree to a peace deal within 50 days.

Iran, which is also under oil sanctions, will hold nuclear talks with Britain, France, and Germany in Istanbul on Friday, according to an Iranian Foreign Ministry spokesperson. This comes after the three European countries warned that if negotiations don’t restart, international sanctions on Iran could be reimposed.

If international sanctions are reimposed on Iran, it could affect oil prices. However, it’s uncertain if these changes would last in the medium term. Similar to Russia, Iran has adapted to sanctions over time and has developed strategies to manage during such periods.

China Fuel Oil Imports Rise in June

China’s fuel oil imports bounced back in June after dropping in May, while exports of bunker fuel oil also increased compared to the previous month, according to customs data released on Sunday.

In June, fuel oil imports reached about 1.4 million metric tons (around 295,708 barrels per day), which is a 7% increase from May but 6% lower than the same time last year.

The rebound came after the Shandong provincial government increased tax rebates on fuel oil imports for some independent refineries. Earlier in the year, demand for refinery feedstock had dropped due to higher import tariffs and reduced tax rebates on fuel oil.

From January to June, total imports fell 19.8% compared to the same period last year, totaling 9.75 million tons.

Source: LSEG

However with trade deal uncertainty lingering, demand concerns are keeping Oil prices in check and this is likely to continue till the August deadline at least.

Saudi Crude Exports Hit 3 Month-Highs

Demand concerns may be on the mind of market participants, however Saudi Arabia crude oil exports rose to a three month high in May. This is according to the latest data by the Joint Organizations Data Initiative (JODI) with the Kingdom leading OPEC + production increases in a move that many analysts view as a pivot strategy to gain more market share.

Oil exports increased by 25,000 barrels per day (bpd) in May, reaching 6.19 million bpd, according to JODI data, which is based on reports from individual countries.

May’s export levels were the highest since February, when shipments surpassed 6.5 million bpd, the data revealed.

At the same time, Saudi crude oil production rose by 179,000 bpd in May, hitting a 23-month high as the Kingdom and its OPEC+ partners began easing production cuts in April.

Technical Analysis - WTI

From a technical analysis standpoint, Oil continues to trade in the tight range between the 100 and 200-day MAs.

Each time it appears that a breakout may materailize in either direction buying or selling pressure has been rearing its head of late.

This is a clear sign of the non-commital nature of market participants at present as they grapple with a host of uncertainties.

For now though, immediate support rests at 66.150 before the 100-day MA at 65.17 comes into focus. A break of this level could lead to further downside.

A move higher needs a clean break and daily candle close above the 200-day MA resting at 68.27, which could open up further upside potential toward the psychological 70.00 handle.

A move beyond this level will find resistance at 71.38 before the psychological 75.00 handle becomes the focus.

WTI USOIL Daily Chart, July 21, 2025

Source: TradingView (click to enlarge)

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