Key Points
- Brent crude traded near $72 per barrel, close to its lowest level since late February.
- Seven OPEC+ countries agreed to increase collective production targets by 188,000 barrels per day from August.
- The decision marked the fifth consecutive monthly increase and brought cumulative quota additions since April to almost 800,000 barrels per day.
- Recovering Gulf exports and rising OPEC production added to expectations of greater physical supply.
- The UKOUSD daily chart places immediate support near $71.70, while $72.60 is the first resistance level to monitor.
Brent crude remained under pressure on Monday, trading near $72 per barrel and close to its lowest level since late February, after OPEC+ approved another production-target increase and Persian Gulf exports continued to recover.
The decline reflects a shift away from immediate supply-disruption concerns. As shipping conditions improve, the market is increasingly focused on whether global demand can absorb the additional crude reaching the market.
Brent has also slipped below its late-February pre-war level, reversing much of the geopolitical risk premium that previously pushed prices above $120.
Why Traders Are Watching
The latest OPEC+ decision strengthened expectations that more crude could enter the market during the coming months.
Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman agreed to increase collective production targets by 188,000 barrels per day from August. The adjustment continues the gradual reversal of voluntary cuts introduced in 2023.
The August increase is the fifth consecutive monthly rise. Combined quota increases since April now total almost 800,000 barrels per day, although actual production and exports have remained below their theoretical targets.
OPEC+ said it would continue to assess market conditions and retain the flexibility to increase, pause or reverse the phase-out of its voluntary adjustments. The seven participating countries are scheduled to meet again on 2 August.
The headline increase may therefore have a limited immediate effect if producers cannot deliver the additional barrels. However, recovering shipping activity is making it more likely that higher quotas will eventually translate into greater physical supply.
Recovering Gulf Exports Add to Supply Concerns
Middle Eastern crude exports have continued to recover as producers restore output and clear barrels that accumulated during the disruption.
OPEC production rebounded by approximately 3.3 million barrels per day in June to 19.43 million barrels per day as Gulf producers restored supply disrupted by the conflict. Gulf oil exports also climbed above 10 million barrels per day, although they remained around 40% below pre-war levels.
The Strait of Hormuz carried roughly one-fifth of global oil and liquefied natural gas shipments before the conflict. Its gradual reopening has allowed more delayed cargoes to enter the market and reduced concerns about an immediate shortage.
The supply recovery remains incomplete. Middle Eastern crude exports in June were still well below their pre-conflict average, suggesting that substantial volumes could return if the shipping route continues to stabilise.
Weak Chinese crude imports have added to the pressure. China’s seaborne purchases fell to their lowest level in more than a decade in June, while higher Russian and non-Middle Eastern exports increased competition for buyers.
The main question is therefore not only how much OPEC+ raises its official targets, but how quickly producers can deliver those barrels and whether demand is strong enough to absorb them.
Key Trading Levels
| Level | What Traders Are Watching |
|---|---|
| $80.00 | Major psychological resistance and previous consolidation area |
| $77.50 | Wider resistance from the late-June decline |
| $75.00 | Important recovery level and previous support |
| $72.60 | Immediate resistance near the latest session high |
| $71.90 | Current trading area |
| $71.70 | Immediate support near the latest session low |
| $70.00 | Major psychological support |
| $67.50 | Wider downside reference if selling accelerates |
UKOUSD is trading near $71.90, placing price between immediate support around $71.70 and resistance near $72.60.
A sustained move above $72.60 could ease immediate selling pressure and bring $75.00 into focus. However, the broader bearish structure would remain intact unless UKOUSD breaks and holds above $75.00.
A confirmed move beyond that level could shift attention towards $77.50, followed by the psychological $80.00 area.
On the downside, a move below $71.70 could expose $70.00. If this psychological level fails, the next wider downside reference is near $67.50.
Bullish and Bearish Setups
| Setup | Trigger | Potential Market Reaction |
| Recovery Attempt | Move above $72.60 | UKOUSD may advance towards $75.00 |
| Bullish Extension | Break above $75.00 | Attention may shift towards $77.50 to $80.00 |
| Range Consolidation | Remain between $71.70 and $72.60 | Price may stabilise near recent lows |
| Bearish Continuation | Break below $71.70 | UKOUSD may test $70.00 |
| Deeper Breakdown | Fall below $70.00 | The decline may extend towards $67.50 |
The bullish scenario depends on UKOUSD moving above $72.60 and holding that level. This would indicate that immediate selling pressure is easing following the recent decline.
A stronger recovery would require a break above $75.00. If buyers clear that level, UKOUSD could extend towards $77.50, followed by wider resistance near $80.00.
The neutral scenario is consolidation between $71.70 and $72.60. Range-bound trading near recent lows may indicate that traders are assessing whether higher production targets and recovering Gulf exports have already been reflected in prices.
The bearish scenario strengthens if UKOUSD falls below $71.70. A confirmed break could bring the psychological $70.00 level into focus. If $70.00 also fails, the decline may extend towards $67.50.
Disclaimer
The price levels and trade scenarios above reflect the author’s view at the time of writing and do not represent financial advice or an official recommendation from VT Markets. Traders should conduct their own analysis and manage risk carefully.
Trade Brent Oil CFDs With VT Markets
Brent oil can experience sharp price movements when OPEC+ production policy, geopolitical developments, shipping conditions and global demand expectations change.
With VT Markets, traders can access UKOUSD and other energy CFDs alongside forex, gold, silver, indices, share CFDs, ETF CFDs and other global markets through one platform.
VT Markets provides the tools to monitor price action, identify key levels and respond as market conditions evolve. Whether UKOUSD recovers above $72.60 or extends its decline below $71.70, traders can follow the setup using advanced charting tools, flexible account options and access to multiple asset classes.
Start trading UKOUSD CFDs with VT Markets today.
Why Trade UKOUSD as a CFD?
CFDs allow traders to take a view on both rising and falling oil prices without taking physical delivery of crude.
This can make UKOUSD CFDs useful during fast-moving market events, particularly when OPEC+ decisions, geopolitical risks, inventory data and demand expectations create short-term volatility.
With VT Markets, traders can access UKOUSD and other major global markets through one account, making it easier to monitor cross-market opportunities as they develop.
What to Watch Next
Traders should monitor whether the August OPEC+ increase results in a meaningful rise in actual production and exports.
Shipping activity through the Strait of Hormuz will remain important. Continued normalisation could allow more delayed crude to reach buyers and strengthen the oversupply outlook.
Chinese crude imports will also be closely watched. A recovery in purchases could help absorb additional supply, while continued weakness may place further pressure on prices.
US inventory data, Russian exports and production from major Persian Gulf countries may provide further information about the near-term balance.
The next OPEC+ meeting on 2 August may also influence expectations. The group has retained the flexibility to increase, pause or reverse its production adjustments.
For now, $71.70 to $72.60 is the main short-term range for UKOUSD. A confirmed move above $72.60 could bring $75.00 into focus, while a break below $71.70 may expose $70.00.
Frequently Asked Questions
Why is Brent crude falling?
Brent has declined after OPEC+ approved higher output targets while exports from Persian Gulf producers continued to recover. Weak Chinese imports and higher supply from other producers have also raised oversupply concerns.
What did OPEC+ announce?
Seven OPEC+ countries agreed to increase their collective production targets by 188,000 barrels per day from August. The increase forms part of the gradual unwinding of voluntary cuts introduced in 2023.
Will the OPEC+ increase immediately add 188,000 barrels per day?
Not necessarily. Some producers remain below their targets because production and shipping have not fully recovered. The market impact will depend on how much additional crude is actually produced and exported.
Why does the Strait of Hormuz affect oil prices?
The strait is one of the world’s most important energy routes. Disruption can restrict global oil and gas supply, while recovering traffic allows more crude to reach the market and can place downward pressure on prices.
What are the main levels to watch in UKOUSD?
Immediate support is near $71.70, followed by $70.00 and $67.50. Immediate resistance is near $72.60, followed by $75.00 and $77.50.
Could Brent oil recover?
Brent could recover if geopolitical risks increase, demand strengthens or producers fail to deliver the expected rise in physical supply. For the UKOUSD chart, a sustained move above $72.60 would be the first indication that short-term selling pressure is easing.
What does oversupply mean for oil prices?
Oversupply occurs when available production exceeds market demand. Excess supply can increase inventories and place downward pressure on prices until production slows or demand improves.
Start trading now — click here to create your real VT Markets account.
