Oil News: EIA Set to Decide Crude Path—$67.44 Support or $71.20 Breakout?

Crude Oil Holds Firm as Supply Risks Battle Surprise Builds

Light crude oil futures are holding steady on Wednesday while traders brace for near-term volatility. Prices are staying above the key $67.44 pivot, keeping support intact as the market looks for a decisive catalyst to test the $71.20 upside target.

Below is what’s driving the supply and demand tug-of-war that will shape your next trade.

At 11:55 GMT, Light Crude Oil Futures are trading $68.47, up $0.14 or +0.20%.

Supply: OPEC+ Adds Barrels, But Geopolitics Tighten Flows

OPEC+ is pushing ahead with a 548,000 barrels per day supply increase in August as voluntary cuts unwind, while the UAE moves to a higher quota. Yet, markets have absorbed these barrels without heavy inventory builds, pointing to steady demand.

The United Arab Emirates’ energy minister said recent supply additions haven’t triggered major inventory surges, showing markets “needed those barrels.” DBS Bank analysts echoed this, noting oil prices have held up despite accelerated supply, reinforcing that markets remain “thirsty” for barrels.

Meanwhile, the Red Sea saw fresh attacks on shipping by suspected Houthi militia forces, including a cargo ship sinking that killed at least four crew members. This has renewed geopolitical risk, injecting uncertainty into shipping lanes that are critical for global crude flows.

Demand: U.S. Travel and Slower Production Keep Bulls Engaged

Demand signals are holding firm. Strong travel during the U.S. July 4 holiday weekend boosted fuel consumption, supporting near-term demand expectations during the summer driving season.

The Energy Information Administration also forecast lower U.S. production in 2025 as drilling slows, which may tighten domestic supply down the road. Traders see this as a supportive factor in the near term while balancing broader macro risks.

Inventory Data Shakes Confidence, Price Levels in Focus

The American Petroleum Institute surprised traders with a 7.1 million-barrel build, sharply missing expectations of a 2.8 million-barrel draw. This 9.9 million-barrel swing has rattled confidence, suggesting demand might not be keeping pace with supply, especially with weaker Asian demand and U.S. export bottlenecks.

Official EIA data is due later Wednesday, with expectations for a 1.7 million-barrel draw. Confirmation of the API’s build could pressure prices, while a draw may allow bulls to push for a breakout toward $71.20.

Oil Prices Forecast: Holding Above $67.44 for Now

For the average trader, the near-term outlook remains cautiously bullish while crude holds above $67.44. A move toward $71.20 is possible if geopolitical risks and travel demand continue to support the market, but confirmation from inventory data will be critical.

If the inventory build is real, traders should prepare for a potential pullback toward $70/bbl, a level that would test shale producers but could help refiners. The battle between supply additions and steady demand will dictate whether crude can break higher or faces a temporary cap in the sessions ahead.

More Information in our Economic Calendar.