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Informist, Wednesday, Jul. 2, 2025

 

By Ashutosh Pati

 

MUMBAI – After a turbulent performance last month, crude oil prices are expected to trade in a broad range in July with a negative bias as market participants anticipate another production hike by the Organization of the Petroleum Exporting Countries and its allies, analysts said.

 

As per the median of estimates from eight broking firms polled by Informist, the July crude oil contract on the Multi Commodity Exchange of India is seen at INR 5,220-INR 5,850 per barrel this month. The August contract of West Texas Intermediate crude on the New York Mercantile Exchange is seen at $62.0-$68.7 per barrel during the month.

 

"Crude oil prices have entered the second half of 2025 with a clearly bearish tilt, underpinned by rising supply and softening global demand," said Riya Singh, research analyst – currency and commodities at Emkay Global Financial Services.

 

OPEC and its allies--Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman--have aggressively increased production by 411,000 barrels per day for three consecutive months in May, June, and July. The cartel is set to meet on Sunday to decide the production levels for August, where a similar hike is expected.

 

"This (the expected increase in August) is no longer a big surprise," Carsten Fritsch, commodity analyst at Commerzbank, said in a report. "Kazakhstan didn't reduce production towards the agreed production target in June either, but apparently even increased it further. Russia, which expressed reservations about a larger increase in production a month ago, does not seem to have any objections this time," Fritsch said.

 

"One more increase from OPEC will be very negative for crude oil (prices)," said Shweta Shah, energy analyst at Motilal Oswal Wealth Management. Market participants will be closely watching any comments from the cartel, and "if they don't (raise production) prices will rally," Shah said.

 

Crude oil prices rose around $10-$12 per barrel in June after tensions between Iran and Israel flared up, but a ceasefire that appears to be holding for now brought prices back to the levels before the conflict. "A rapid unwind of the Middle East (West Asia) risk premium, following a surprise ceasefire between Israel and Iran, removed nearly $10/bbl of geopolitical support as Strait of Hormuz flows remained undisturbed and Iranian crude exports continued," Singh said.

 

At 1545 IST, the July crude oil contract on the MCX was 0.8% higher at INR 5,661 per barrel. The August WTI contract on NYMEX was also up 0.8% at $65.94 per barrel.

 

Meanwhile, crude oil inventories in the US are about 11?low the five-year average for this time of the year due to strong summer demand, but production is at record levels, adding to the oversupply in the market. According to the US Energy Information Administration, crude oil inventories in the country have declined for five consecutive weeks and are at 415.1 million barrels in the week ended Jun. 20.

 

Singh said that despite large inventory draws and falling refinery utilisation rates in the US, sentiment remains firmly bearish as markets focus on rising global supply, not only from OPEC but also from countries outside the cartel such as the US, Brazil, Canada, and Guyana.

 

"The true test will be whether summer travel demand can absorb the additional supplies OPEC plans to introduce, otherwise, prices could face steep sell-off pressure," Motilal Oswal Wealth Management said in a report.

 

The demand outlook, meanwhile, remains tepid. Major energy agencies such as the EIA and the Paris-based International Energy Agency have lowered their projection for global oil demand growth. The IEA lowered its forecast for global crude oil demand growth in 2025 to 720,000 barrels per day in its latest forecast. The agency has also lowered its forecast for global oil demand growth in 2026 to 740,000 barrels per day from 760,000 barrels per day earlier.

 

The EIA also lowered its forecast for global oil demand growth in 2025 to 800,000 barrels per day in its latest forecast from its previous projection of 1 million barrels per day.

 

"On the demand side, the outlook has deteriorated. China's oil demand growth has slowed to just 155,000 bpd (barrels per day) amid structural shifts toward electric vehicles, reduced heavy industrial activity, and soft factory data," Singh added.

 

Following is a summary of the poll by Informist on crude oil prices for July and details of the estimates by respondents:

 

Brokerage	MCX support (in INR)	MCX resistance (in INR)	NYMEX WTI support ($)	NYMEX WTI resistance ($)
Emkay Global Financial Services Ltd.	4,700	6,500	62	68
Kedia Advisory	5,240	6,080	61.4	68.9
Kotak Securities	5,200	5,800	--	--
LKP Securities	5,300	5,800	62.0	67.5
Motilal Oswal Wealth Management	5,200	5,800	62.0	68.0
Nirmal Bang	4,900	6,180	60.0	72.3
Prithvi Finmart	5,300	5,850	62.0	70.0
Reliance Securities	5,400	5,850	64.0	68.7
Median	5,220	5,850	62.0	68.7

 

End

 

US$1 = INR 85.70

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

With inputs from J. Navya Sruthi

Edited by Saji George Titus

 

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