What to Know

  • OPEC output increased by 1.17 million barrels per day in July, taking total production to 19.85 million barrels per day, with Kuwait and Iraq among the Gulf producers restoring supply.
  • OPEC+ has approved another 188,000 barrels per day production increase for September as it continues unwinding voluntary production cuts.
  • Shipping through the Strait of Hormuz remains heavily constrained, with only 6 ships recorded on Monday versus a 10-day average of 11 and pre-conflict volumes of 130-140 ships a day.
  • WTI crude is trading near $83.59 after breaking above a descending trendline, with $84.74, $86.87, and $90.04 in focus if momentum continues.
  • Brent crude is trading around $89.20 after its own trendline breakout, with $91.13 standing as the next major resistance level.
  • Natural gas is trading at $2.78 after breaking a falling trendline and the prior resistance zone at $2.73, but it is testing resistance around the 50 EMA, 100 EMA, and $2.81 area.
  • U.S. gas inventories reached 3,117 Bcf after a 33 Bcf injection, leaving storage 195 Bcf above the five-year average.

Oil Markets Balance OPEC Recovery Against Hormuz Risk

Oil markets continue to trade around a difficult supply equation: OPEC production is recovering, but the flow of energy cargoes through one of the world’s most important shipping corridors remains deeply constrained. The Middle East remains the central driver for crude and natural gas sentiment as hopes for a U.S.-Iran agreement have dimmed and shipping through the Strait of Hormuz remains limited.

The Strait of Hormuz remains a key pressure point because any disruption there can reduce the practical availability of supply even when producers are restoring output. Only 6 ships were recorded transiting Hormuz on Monday, compared with a 10-day average of 11 and pre-conflict volumes of 130-140 ships a day. That gap helps explain why traders have been reluctant to treat higher OPEC production as a straightforward bearish development for crude prices.

Saudi Aramco has delayed the restart of the Jazan refinery following Houthi attacks, while ADNOC has continued using tenders and other supply methods to offset gaps. These operational adjustments show that the market is not only reacting to headline production totals, but also to the logistics of getting barrels and related energy products where they need to go.

OPEC Supply Rebounds, But Quotas Remain a Factor

OPEC output increased sharply in July as Gulf producers restored production following wartime disruptions. Production rose by 1.17 million barrels per day in July, taking total OPEC output to 19.85 million barrels per day. Kuwait and Iraq were among the key contributors to the recovery as regional supply normalized.

Even so, output has remained significantly below quotas, which complicates the bearish reading of the supply increase. In market terms, a production rebound matters, but the scale of spare capacity, compliance gaps, export bottlenecks, and shipping restrictions can all limit how quickly those barrels translate into looser global balances.

OPEC+ has also approved a further increase of 188,000 barrels per day for September, completing the scheduled unwinding of a layer of voluntary production cuts. The group’s next scheduled review is on the 6th of September, a date traders are likely to watch closely for any change in tone if price strength continues or if logistical stress worsens.

Natural Gas Faces the Sharpest Disruption From Hormuz Constraints

The disruption appears especially important for natural gas. ADNOC Gas reported a 52% decline in profits for Q2 2022 compared with Q2 2021, with the total decline reported at $665 million and attributed to the closure of the Strait of Hormuz. The company adjusted full-year profits to $3.5-4 billion, highlighting how regional disruption can affect gas earnings and supply expectations beyond the immediate crude market.

U.S. natural gas supply offers some cushioning. EIA data showed working inventories reached 3,117 Bcf after a bigger-than-expected 33 Bcf injection, leaving storage 195 Bcf above the five-year average. A storage cushion can ease domestic supply concerns, although it does not fully offset the international importance of liquefied natural gas flows when global buyers are responding to regional disruptions.

Cheniere shipped 184 LNG cargoes in Q2, up 19.4% from the year prior, and lifted its 2026 EBITDA range to $7.9-$8.4 billion on the strength of global LNG demand. The EIA’s Short-Term Energy Outlook is set for August 11th, and its updated forecasts for oil production, LNG, and gas demand are likely to shape the next round of fundamental positioning.

Natural Gas Technical Outlook: $2.81 Resistance Comes Into View

Natural gas is trading at $2.78 after breaking a falling trendline and the previous resistance zone at $2.73. The move has improved the short-term technical structure, but price is now testing an important cluster that includes the 50 EMA at $2.79, the 100 EMA at $2.80, and a resistance zone at $2.81.

Technical traders are watching whether buyers can defend the former resistance zone now acting as support. The lack of visible profit-taking around that area suggests that some market participants remain willing to hold exposure while price stays above the breakout zone. Still, the $2.81 area is important because it combines horizontal resistance with nearby moving averages.

RSI has risen into a bullish zone, and $2.88 is the next upside target if natural gas clears resistance. Recent support is located at $2.73, with additional support at $2.66 and $2.61. While price holds $2.73, the bullish scenario remains intact for many chart watchers. A break above $2.81 would strengthen the case for a push toward $2.88, while a reversal through the EMA cluster would shift attention back toward the breakout area.

WTI Technical Outlook: Breakout Keeps $84.74 in Focus

WTI crude is trading near $83.59 after breaking above the descending trendline that had capped gains since the recovery in late July. The breakout has moved price above both the 50 EMA at $79.82 and the 100 EMA at $80.15, while recent bullish candles suggest buyers remain in control after the move through trendline resistance.

RSI is now at 68, indicating strong momentum but also suggesting that the market may be approaching overbought conditions. That does not automatically signal a reversal, but it can increase the risk of short consolidation if buyers hesitate near the next resistance zone.

The first upside target for WTI is $84.74, followed by $86.87 and $90.04 if the breakout extends. The first support level is $81.92, while a stronger support cluster sits around $79.80-$80.15, close to the key EMA zone. A break below that area would put $77.76 back in focus.

For now, the WTI structure remains constructive while price holds above $81.92. If buyers push through $84.74, technical traders may look for an extension toward $86.87. If WTI fails to sustain momentum above the first resistance, a pause or short consolidation would remain consistent with the recent strength rather than necessarily marking a full trend reversal.

Brent Technical Outlook: $91.13 Is the Next Major Test

Brent crude is trading around $89.20 after breaking a long-standing descending trendline on the 4-hour chart. The move has shifted the short-term technical bias in favor of buyers, with Brent now holding above the broken trendline as well as the 50 EMA at $84.39 and the 100 EMA at $84.71.

The position above those moving averages suggests the earlier bearish structure has weakened. Recent bullish candlesticks reinforce that view, while RSI at 69 points to strong momentum that is close to an overbought state. As with WTI, that combination supports the bullish case but also warns that chasing price too aggressively near resistance may carry higher risk.

The nearest significant upside target for Brent is $91.13, followed by $95.23 and $99.07 if the breakout continues. On the downside, the moving average convergence divergence framework points to first support at $86.43, with additional support around $84.40-$84.70. If selling pressure deepens, $81.54 could come back into play.

Brent’s medium to longer-term technical picture remains constructive while it holds above $86.43, the former breakout level. A clear break above $91.13 would provide stronger evidence of upside continuation and could bring higher resistance levels back into focus. Until then, the market is likely to remain sensitive to both chart signals and developments around Hormuz flows.

Energy Market Outlook: Technical Momentum Meets Geopolitical Supply Risk

The current energy market setup is defined by a tug of war between recovering production and constrained delivery channels. On one side, OPEC output has recovered and OPEC+ is proceeding with another scheduled increase. On the other side, Strait of Hormuz traffic remains far below pre-conflict norms, keeping traders alert to the risk that available supply may not reach global markets smoothly.

For crude oil, this means technical breakouts in WTI and Brent are being supported by a fundamental backdrop that remains vulnerable to disruption. For natural gas, the situation is more complex because U.S. storage is comfortable relative to the five-year average, but international LNG dynamics remain tied to global demand and regional shipping conditions.

FXCOINZ market coverage suggests traders are likely to focus on three immediate triggers: whether WTI can clear $84.74, whether Brent can break $91.13, and whether natural gas can convert $2.81 from resistance into support. The next EIA outlook on August 11th and the OPEC+ review on the 6th of September may provide the next major fundamental catalysts.

Frequently Asked Questions (FAQs)

Why are oil prices rising if OPEC production increased?

Oil prices can rise even when production increases if shipping constraints limit how much supply reaches the market. The Strait of Hormuz remains heavily constrained, with only 6 ships recorded on Monday versus a 10-day average of 11 and pre-conflict volumes of 130-140 ships a day.

How much did OPEC production increase in July?

OPEC production increased by 1.17 million barrels per day in July, bringing total output to 19.85 million barrels per day. The recovery was led in part by Gulf producers including Kuwait and Iraq.

What did OPEC+ approve for September?

OPEC+ approved an additional production increase of 188,000 barrels per day for September. The move completes the scheduled unwinding of a layer of voluntary cuts, with the next scheduled review on the 6th of September.

What is the key WTI level to watch?

WTI is trading near $83.59, with $84.74 as the first upside target. Support is at $81.92, and the broader bullish technical structure remains intact for many traders while price stays above that level.

What is the next Brent resistance level?

Brent is trading around $89.20, and the next major resistance level is $91.13. If buyers break that level, chart watchers may focus on $95.23 and $99.07 as additional upside levels.

Why is natural gas testing an important technical zone?

Natural gas is trading at $2.78 after breaking above a falling trendline and the former resistance zone at $2.73. It is now testing the 50 EMA at $2.79, the 100 EMA at $2.80, and resistance near $2.81.

What are the next natural gas targets?

If natural gas breaks above $2.81, the next bullish target is $2.88. Support sits at $2.73, with additional support at $2.66 and $2.61 if momentum fades.

How do U.S. gas inventories affect the outlook?

U.S. working gas inventories reached 3,117 Bcf after a 33 Bcf injection, leaving storage 195 Bcf above the five-year average. That provides some cushioning, although global LNG demand and Hormuz-related risks remain important.

What upcoming events could influence energy markets?

The EIA’s Short-Term Energy Outlook is set for August 11th, and OPEC+ has its next scheduled review on the 6th of September. Traders will watch both for updated views on production, LNG, gas demand, and supply policy.

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