Oil loses momentum

#XTIUSD

Key zone: 62.00 - 64.00

Buy: 64.50 (on strong positive fundamentals); target 66.50-67.50; StopLoss 63.80

Sell: 61.50 (after a retest of 63.50); target 59.00; StopLoss 62.30

After a 1.1% gain in the previous session, Brent quotes rolled back to $66 per barrel, while WTI held around $63. The decline was driven by several factors: expectations of oversupply, the end of the summer high-demand season, and the weak impact of geopolitical risks.

The key influence on the market comes from the situation around Ukraine. Despite Trump’s efforts to secure a Ukraine–Russia summit, no ceasefire was achieved — hostilities continue. The suspension of supplies through the “Druzhba” pipeline, damaged by shelling and limiting exports to several Central European countries, had no effect on the price, only adding tension to the political conflict.

At the same time, any truce or restriction of military actions could increase supplies of Russian oil to the global market.

The more than 10% drop in oil prices since the beginning of the month reflects fundamental concerns: US trade policy increases uncertainty, while production recovery within OPEC+ creates the risk of surplus.

Investors closely monitor the dynamics of sanctions policy. Trump tightened restrictions against India for purchasing Russian oil, but China has so far avoided secondary sanctions. This is a key point: India has effectively become the global clearing hub for processing Russian oil under embargo, providing Moscow with currency liquidity.

White House adviser Peter Navarro has already demanded that India stop importing Russian oil in exchange for US strategic partner status. However, India’s current total tariff burden (50%) remains among the highest of Washington’s trading partners. In this configuration, China benefits — tightening pressure on Indian refineries will open additional opportunities for Chinese processors.

A scenario of immediate and strict enforcement of sanctions could push prices to $80 and above. But for Trump, this is politically disadvantageous: expensive oil would hit the US economy. More likely is a selective system of exemptions, similar to the 2018 policy, when sanctions against Iran forced the White House to roll back part of the decisions.

Today OPEC is unlikely to provide the US with maneuvering room under Trump’s TACO system, but the market remains extremely vulnerable to volatility spikes. At the same time, the probability of a sustained upward reversal in prices is minimal: the supply-demand balance is not in favor of “black gold.”

So we act wisely and avoid unnecessary risks.

Profits to y’all!