By Wael Makarem, Financial Markets Strategists Lead, Exness
July 22, 2025:
Crude oil futures remained under some pressure and could remain potentially volatile. The prevailing softness reflects mounting concerns regarding global demand in the context of escalating trade tensions between the United States and its trading partners, including the European Union. These frictions have intensified fears of a slowdown in economic activity, curtailing prospects for growth in fuel consumption. Both the International Energy Agency and OPEC have revised down their 2025 demand forecasts. This cautious outlook on demand is set to weigh on prices.
On the supply front, OPEC+ continued to unwind its production cuts, resulting in increased crude availability and pressure on prices. The softer price environment earlier this year has prompted Asian refiners to rebuild inventories, a process that may continue if prices remain subdued, supporting prices to a certain extent. However, a pause in OPEC’s production increases later this year could limit the downside risk.
Traders could continue to monitor policy changes from oil producers and the progress in negotiations between the US and the EU. Additionally, tomorrow’s crude inventories data could provide more information about the demand in the US, which could affect the direction of the market in the short term.