WTI Oil prices are trading around $61.50 per barrel, maintaining gains supported by reduced trade war fears between the US and the EU. US President Trump has delayed the 50% tariff implementation on the EU from June 1 to July 9.

EU Commission President Ursula von der Leyen mentioned readiness for trade talks with the US, seeking more time for a possible agreement. Earlier threats of tariffs followed an unfavourable trade proposal from Brussels to Washington.

Geopolitical Tensions Impacting Oil Prices

Geopolitical tensions add to price support as Israel plans military actions in Gaza. Concerns over additional Iranian Oil supply have lessened, credited to stalled US-Iran nuclear negotiations.

Nonetheless, potential increases in Oil output could limit price rises. OPEC+ may raise output by an extra 411,000 barrels per day for July and might reverse the 2.2 million bpd production cut by October’s end.

WTI Oil is a type of Crude Oil known for being light and sweet, primarily sourced in the US. It is influenced by supply-demand factors, political instability, and OPEC decisions. Weekly API and EIA inventory reports also impact Oil prices, as they indicate changes in supply-demand balance.

With WTI currently hovering near $61.50 per barrel, recent market resilience owes much to the tamping down of transatlantic tariff anxieties. The decision from Washington to push back a steep 50% levy on European Union goods until July has taken heat off risk sentiment, with investors now eyeing a slim window for renewed dialogue. Von der Leyen’s stance suggests Brussels is prepared to re-engage in structured trade discussions if granted more leeway, which provides some temporary cushion for broader market expectations.

Short Term Trading Strategies

That said, a simple delay does not nullify the threat. The possibility of resumed tensions in early July would reintroduce volatility, especially if initial trade negotiations falter or stall altogether. For energy contracts, this has meant that any long exposure should be approached with caution beyond the first week of July, particularly once fresh data from EIA and API updates offer revised reads on inventory levels. The muted risk-off sentiment may vanish quickly should rhetoric escalate or timelines slip without tangible outcomes.

Geopolitical risk continues to be a variable that keeps the market partially supported. Israel’s increasingly direct language regarding operations in Gaza underscores a broader Middle Eastern backdrop that remains fraught, though nothing outside the usual pattern of instability has been priced in just yet. For now, disruptions in physical supply have not materialised, but a shift in regional posturing could serve to tighten sentiment-driven trading.

This comes as fears of Tehran ramping up output have faded somewhat. Talks between Iran and the US remain frozen with little material progress, which has reassured participants who were pricing in potential oversupply earlier in the year. Tehran’s absence from meaningful dialogue keeps Iranian barrels effectively sidelined in the near term, which relieves some of the bearish pressure on crude benchmarks.

However, that relief may prove temporary. The production side remains the lingering concern. OPEC+, though providing some short-term clarity by signalling a 411,000 bpd increase for July, stands ready to unwind the larger 2.2 million bpd reduction by late Q3. Market participants will need to stay agile, tracking actual member compliance and updates to the production outlook at ministerial meetings, which tend to spark sharp positioning shifts. If the group signals any acceleration to that schedule, that would directly impact spot and forward curves.

Recent price gains, then, rest on a knife-edge—buoyed by diplomatic delays and temporary calm—but sensitive to supply-side decisions and periodic flare-ups. Inventory data from the US should remain a primary point of reference. Adjustments often lead the market by revealing early signs of misalignment between expected and actual demand.

From a short-term strategy angle, we’re mainly focusing on option premiums and implied volatility skews across contracts expiring in late summer. The current level of backwardation isn’t extreme, but any fresh inventory builds or early hints from OPEC ministers could push intramonth spreads wider. Watch the Brent-WTI spread as well—it remains a useful indicator of transatlantic flows and shifting export balances.

Risk management here isn’t about abandoning long or short bias entirely—it’s about selectively layering protection or exposure based on the narrowing cushion between price drivers. Every movement in geopolitical tone, inventory trend, and production quota is adding quantifiable weight to positions. We remain closely aligned with core data releases and real policy changes rather than rhetoric alone.

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