Oil, fundamental analysis

Crude prices fell to levels not seen in 3 months during this holiday-shortened trade week as any bullish support fell sway to several bearish signs.

WTI’s high for the week was Tuesday’s $66.05/bbl as the market believed, erroneously, that the new sanctions on India would reduce its oil purchases from Russia. Additionally, Ukraine continued its attacks on Russian oil infrastructure raising concerns about diminishing output. However, affirmation from India regarding continuing Urals purchasing, the OPEC+ group meeting this weekend and, an unexpected increase in crude inventories sent prices lower.

WTI was as low as $61.5/bbl on Friday, below the technically significant Lower-Bollinger Band limit at $61.88. Brent crude also hit its high on Tuesday at $69.55/bbl and its low on Friday at $65.05/bbl. Both grades are substantially below last week’s levels while the WTI/Brent spread has widened to ($4.05).

India’s Finance Minister this week emphasized his country’s plan to continue to purchase Russian oil despite the recently added 25% tariffs imposed by the Trump administration. In turn, Russia has lowered its sales price to India to help offset some of that lost revenue.

Meanwhile, even though Russian output has largely not declined, lower prices and added global production is causing financial hardship for the country’s oil giants. Rosneft, Russia’s largest oil produced saw a 68% decline in profits during first-half 2025. 

OPEC+ meets this weekend and market observers are on both sides of the tables in terms of what action, if any, the group may take. Some believe that the current low prices will act as a disincentive to increasing output while others contend that the goal of the group is to take back market share at any cost. What has yet to be quantified is whether or not all of the members are meeting the latest output increases. Historically, they have not risen to the stated levels.

The Energy Information Administration’s (EIA) Weekly Petroleum Status Report indicated that commercial crude oil inventories for last week increased while production remained stable at 13.4 million b/d. The EIA is reporting that the average daily crude production for June hit a new high of 13.58 million b/d. 

US job growth continued to stall in August as only 22,000 jobs were added vs. an expected increase of 75,000. Furthermore, June’s numbers were revised to a net loss of 13,000 jobs.

New claims for unemployment benefits last week rose to the highest level since June at +237k up from the prior week’s +229k. Positive news came from the ISM which reported that their New Orders Index for August was 56.0 vs. July’s 50.3 and the Services PMI was 52.0 last month vs. July’s 50.1. The Dow and S&P indexes are lower week-on-week on the meager jobs report while the NASDAQ is slightly higher. The USD is flat on the week which is neither supportive nor negative for crude.  

Oil, technical analysis