However, the market turned cautious as the 90-day pause on higher U.S. tariffs is set to expire on July 9 without fresh trade deals with major partners like the EU and Japan, adding uncertainty to the demand outlook.
At 09:56 GMT, Light Crude Oil Futures are trading $66.75, down $0.70 or -1.04%.
OPEC+ Output Hike May Add to Supply Pressures
Traders are positioning for the OPEC+ meeting this weekend, where the alliance is expected to approve an output increase of 411,000 barrels per day. This potential supply boost arrives as crude sits near technical support at the 200-day moving average of $65.23, keeping downside levels in focus.
Still, if the market generates enough upside momentum, acceleration toward the short-term pivot of $71.20, which marks the 50% retracement of the $78.40 to $64.00 range, remains in play.
U.S. Inventory Build and China Slowdown Raise Demand Concerns
On the demand side, signals are softening. U.S. crude inventories unexpectedly rose by 3.8 million barrels to 419 million barrels last week, contrary to forecasts for a 1.8 million barrel draw, highlighting tepid domestic demand. Gasoline demand dipped to 8.6 million barrels per day, raising concerns about consumption during the peak summer driving season.
In China, service sector activity expanded at the slowest pace in nine months, with new export orders declining, suggesting weaker oil demand from the world’s top importer. These signals are feeding into the cautious positioning by traders ahead of the July Fourth holiday, with many opting to reduce exposure during the long U.S. weekend.
