Crude Oil Forecasts – Summer Range Limits Upside Despite Geopolitical Risks

WTI crude settled near $74 a barrel Friday, caught between two opposing forces. The Middle East conflict threatens supply routes. Slowing economic growth in China and Europe pulls demand lower. The result is a summer range that leaves little room for a sustained rally, several market participants said.

Brent crude faces a similar ceiling near $83, where the 200-day moving average sits. That technical level has held since late May. A move above it would require either a sharper escalation in the Israel-Hamas conflict that disrupts actual production, not just shipping routes, or a clear sign that OPEC+ will extend its voluntary cuts beyond September. Neither looks probable in the near term, traders said.

The U.S. Energy Information Administration reported a 3.6-million-barrel increase in crude stocks last week, the first build in four weeks. That tempered some of the fear premium, traders said. On the demand side, China's factory activity shrank for a second straight month in July, according to the official purchasing managers' index. Europe's manufacturing recession is deepening. These factors limit how high crude can go even if the Middle East conflict widens.