Sources indicate the group may approve an additional 550,000 bpd hike for September, unwinding the last tranche of cuts during its August 3 meeting. While this supports near-term physical supply, traders are weighing the potential oversupply risk if seasonal demand ebbs post-summer.
U.S. Tariff Uncertainty Adds to Demand Risks
President Trump’s plan for sharply higher tariffs from August 1 has injected uncertainty into broader markets, stirring concerns over global demand impacts on crude.
While Trump hinted the deadline may not be firm, the potential for escalating trade tensions is a watchpoint for traders, particularly as tighter middle distillate markets and Houthi threats on shipping routes are supporting prices at the margins.
Managed Money Remains Bullish Into Summer Demand
Traders remain constructive near-term, with Commodity Futures Trading Commission data showing money managers increased net-long positions in crude futures and options during the week ending July 1.
This signals ongoing confidence as the U.S. enters peak summer driving season, counterbalancing the headwinds from OPEC+ supply increases and tariff risks.
