Crude Oil Bearish Momentum Continues Amid Rising Inventories and Seasonal Risks

The global crude oil market enters August 2025 under pronounced downward pressure, extending a trend established over the prior weeks. Both major benchmarks—NYMEX WTI and ICE Brent—registered sustained declines, with most forward contracts dropping over 0.6% in the latest session. This shift reflects a confluence of intersecting forces: persistent builds in US inventories, rising Russian exports despite quotas, and lacklustre demand growth in key consuming regions such as China and India. While geopolitical risk premiums from the Middle East remain structurally present, the market’s attention has pivoted to fundamentals, particularly as OPEC+ signals reluctance to deepen production cuts.

Weather risks also loom, with the US Atlantic hurricane season forecasted to be above average. This brings potential volatility for Gulf Coast production and transport, though to date, no disruptions have materialised. Meanwhile, US gasoline draws lag seasonal trends, and speculative net-longs in crude futures have unwound, adding downside price pressure. The short-term climate is thus increasingly defensive—traders are recommitting to range-bound strategies, and recommendation bias is tilting towards caution as momentum for a sustained rally fades. This report delivers a full spectrum view, from price action across key exchanges to the drivers shaping sentiment, actionable trading insights, and a detailed 3-day price forecast for market participants.

📈 Prices & Market Sentiment

Exchange/Contract	Closing Price	Weekly Change	Market Sentiment
NYMEX WTI Sep 2025	USD 69.35/bl	-0.94%	Bearish
NYMEX WTI Oct 2025	USD 68.28/bl	-0.95%	Bearish
ICE Brent Sep 2025	USD 72.53/bl	-0.98%	Bearish
ICE Brent Oct 2025	USD 71.76/bl	-0.99%	Bearish
NYMEX WTI Aug 2025 (last report)	USD 59.79/bl	-0.69%	Bearish
ICE Brent Aug 2025 (last report)	USD 62.78/bl	-0.91%	Bearish

🌍 Supply & Demand Drivers

• US crude stocks are at 10-month highs after a recent build, pressuring WTI forward curves.
• Russian crude exports are near 4 million bbl/day, with OPEC+ production discipline weakened by consistent quota circumvention.
• Asia demand: Signs of recovery in China equities offset by mixed industrial activity and soft import demand; India’s draws remain below expectations.
• Geopolitical risk premiums (Middle East, Red Sea) remain, but no significant new disruptions are imminent.
• Speculative positioning: Hedge funds reduce net-long positions; some managers net-short in both benchmarks.
• US gasoline consumption: Draws lag seasonal averages; diesel demand has not recovered to pre-pandemic levels.

📊 Fundamentals

• Global production (mil bbl/day):
  • US: 13.2
  • Saudi Arabia (OPEC+ quota): 9.0
  • Russia: 10.8
  • UAE: 4.0
  • China (net importer): 4.2
• Inventories (mil bbl):
  • US: ~470
  • Saudi Arabia: ~165
  • Russia: ~100
  • UAE: ~45
• OECD commercial stocks remain above the 5-year average due to recent builds.
• China’s strategic reserve build is ongoing, but the pace has slowed from 2023【6:11†full-posts-2025.json】.

🌦️ Weather Outlook & Risk Analysis

• NOAA forecasts an above-average hurricane season in the Gulf of Mexico. While hurricane risk is rising, no disruptions have materialised yet.
• Above-average heat across the US Midwest and Gulf Coast is supporting seasonal refined product demand.
• The Middle East remains gripped by drought and higher-than-average temperatures, but oil production is unaffected so far.
• Russia & Caspian: No major weather disruptions anticipated at this stage.

🌐 Global Production & Stock Comparison

Country	Production (mil bbl/d)	Inventories (mil bbl)	Exports (mil bbl/d)
US	13.2	~470	3.5
Saudi Arabia	9.0	~165	7.4
Russia	10.8	~100	5.3
UAE	4.0	~45	2.7
China (net importer)	4.2	N/A	N/A

📌 Trading Outlook & Recommendations

• Short-term trend remains bearish; technical support near USD 68/bl for Brent, USD 66/bl for WTI.
• Range-bound price action likely for the coming week (WTI: USD 64–70; Brent: USD 66–73).
• Physical buyers should maintain cautious coverage—hedge using put options or protective strategies.
• Exporters: Be prepared for potential price rallies linked to hurricane season or surprise OPEC+ policy announcements.
• Monitor speculative positioning and US inventory releases closely for market direction.

📆 3-Day Regional Price Forecast

Exchange	Contract	Forecast Price (USD/bl)	Trend
ICE	Brent Sep 25	71.00 – 73.00	Stable/Sideways
NYMEX	WTI Sep 25	68.50 – 70.50	Slight downside/Range-bound
ICE	Brent Oct 25	70.30 – 72.30	Stable
NYMEX	WTI Oct 25	67.50 – 69.50	Slight downside/Stable