Trading Update 6th July 2025

This Week in Oil: Key Drivers Behind Brent Crude’s Movement

Between 29 June and 6 July 2025, Brent crude traded in a tight range of US$66.9 to US$69.2 per barrel. Prices opened at around US$67.6 on 29 June, climbed to US$69.1 by 2 July, and then eased back to close near US$68.4 on 6 July. This modest gain reflected a tug‑of‑war between rising OPEC+ output and persistent geopolitical tensions. Traders reacted swiftly to each fresh headline, keeping volatility elevated during daily sessions. Overall, spread betters saw limited directional moves but could exploit intraday swings for profit. Market sentiment remained cautiously optimistic, tempered by supply‑side increases and demand‑side concerns.

Stocks and Index Impact

Energy stocks mirrored Brent’s modest rise and fall. In the United States, the S&P 500 energy sector climbed as Brent neared a four‑month high. Major oil majors outperformed their peers on expectations of tight supply if Middle East tensions reignited. Conversely, broader equity indices surged on hopes for a regional ceasefire, reducing risk aversion. In the UK, the FTSE 100 edged higher as energy shares rebounded, helping to offset pressure from weak industrial stocks. Traders noted that oil‑linked stocks showed the greatest intraday swings, offering ideal opportunities for spread bets tied to both indices and single stocks.

Geopolitical Tensions: Middle East Flare‑ups

The week’s volatility largely stemmed from renewed clashes between Israel and Iran. Early in the period, reports of air strikes against key sites pushed Brent above US$69. Risk premiums rose further when Iran threatened to close the Strait of Hormuz, the transit for one‑fifth of global crude. However, a sudden announcement of a ceasefire caused prices to drop nearly 3% on 4 July. Despite that correction, traders remained wary. Any renewed threat to maritime routes could send Brent spiking over US$75 in a flash. For spread betters, this meant closely monitoring news flows for potential short-term opportunities.

Supply Signals: OPEC+ Output Boost

OPEC+ continued to unwind its voluntary cuts, adding fresh barrels to global markets. The group confirmed a 548,000 bpd increase for August and a further 550,000 bpd in September. These boosts complete the reversal of cuts totalling over 2 million bpd. As these supplies start reaching storage hubs, Brent retreated from its mid‑week highs. Analysts view this as a strategic play to defend market share and counter US shale growth. For short‑term traders, this cap on upside presented a clear technical ceiling around US$69.50, making it a focal level for spread‑bet entry and exit points.

Demand Fundamentals and Inventories

On the demand side, China’s crude imports remained flat in June, disappointing many forecasts of growth. This lacklustre reading raised concerns about future oil consumption from the world’s largest importer. In the US, weekly stock reports showed rising crude inventories, putting downward pressure on West Texas Intermediate and, by extension, Brent. Traders noted that persistent inventory builds could weigh on prices if demand fails to pick up. Nevertheless, some forecasts warned that any sudden spike in regional tensions could override these bearish signals, offering spread betters a two‑sided market to trade around.

Strategic Analysis for Spread Betters

Short‑term traders should expect Brent to shuffle between US$66.5 and US$69.5 until fresh catalysts emerge. Geopolitical headlines will trigger sharp, short-lived spikes and dips, making them ideal for intraday spread positions. Mid‑term, OPEC+ supply increases will likely cap Brent below US$75, favouring range‑bound strategies. In the longer term, analysts forecast Brent to drift towards US$59 by Q4 2025, assuming stable supply and slower demand growth. Spread betters can use option strategies to profit from volatility while limiting risk. Combining technical levels with fundamental analysis offers a robust approach to capturing moves in both directions.

Key Drivers This Week

1. OPEC+ output hikes: Additional barrels scheduled for August and September weigh on upside.

2. Middle East tensions: Israel–Iran skirmishes drove up risk premiums, then eased with hopes of a ceasefire.

3. Demand signals: Flat Chinese imports and rising US crude stocks highlight slack consumption.

By focusing on these three core drivers, spread betters can anticipate potential price bursts or retracements and align their trades accordingly.

How It Affects Spread Betting Strategies

This week’s market structure offered several profitable angles. Trade Brent’s intraday volatility around key geopolitical news. Fade spikes above US$69 when headlines calm—Utilise forward-rolling strategies to hedge against the potential OPEC+ supply surge. Consider options to capture sharp, transient moves while preserving capital. For those favouring index bets, energy‑heavy indices like the S&P 500 energy sector and the FTSE 100 present tight correlations with crude prices. Watching technical levels around US$66.50 and US$69.50 provides clear entry and exit guidelines. Always set disciplined stops to manage risk in this dynamic environment.

What to Watch Next

Looking ahead, traders should monitor the following:

• OPEC+ meetings: Any tweaks to output quotas can trigger directional moves.

• Iran–Israel developments: Renewed threats to shipping lanes could spark sharp rallies.

• Global demand indicators: Chinese import figures and US inventory updates will reveal trends in demand.

These data points will steer Brent’s next decisive swing. Active spread betters who track them and act swiftly can capitalise on both rallies and sell‑offs. Remember to manage exposure and adjust position sizes based on each catalyst’s risk profile.

Keep an eye on the oil prices here.