Freedom analysts forecast a recovery in oil prices after WTI fell to $68.7 per barrel. Last week, prices declined by 0.8%, reaching their lowest level since February 28, 2026, when the conflict between the U.S. and Israel with Iran began.
Freedom notes that the market rebound can be played through the popular exchange-traded funds USO and DBO, which track crude oil prices.
Pressure on the sector is being driven not only by expectations of a peace agreement between the U.S. and Iran, but also by OPEC+’s decision to increase production quotas. Following the July 5 meeting, the alliance countries agreed to raise August quotas by 188 thousand barrels per day. Freedom believes that member states may take a similar step in September as well.
Oil inventories
Data from the U.S. Department of Energy support the price recovery scenario. U.S. oil production was largely unchanged at 13.8 million barrels per day, while total inventories of oil and petroleum products fell by 6.3 million barrels and are at their lowest levels in 22 years. Commercial crude oil inventories decreased by 3.8 million barrels to 408.4 million barrels.
An additional supportive factor remains strong fuel demand. Sales of gasoline, diesel, and jet fuel increased by 0.4 million barrels per day to 14.4 million barrels per day, and refinery throughput rose to 17.2 million barrels per day.
Oil market situation in July 2026
According to the U.S. Energy Information Administration (EIA), commercial crude oil inventories last week fell to their lowest level since 2018 due to rising domestic demand for petroleum products. This factor allowed Brent to end trading with a slight gain, despite a possible increase in global supply.
Saudi Arabia’s decision to cut oil prices became another factor pressuring the market. At the same time, fundamental factors are providing additional support: U.S. commercial crude oil inventories remain at multi-year lows, and fuel demand stays strong. Under these conditions, a reduction in Saudi Aramco’s official selling prices may intensify competition for buyers in Asia in the short term.
Freedom believes that in the coming weeks the market will remain sensitive to any news from the Middle East. Even if the ceasefire between the U.S. and Iran holds, the risk of a new escalation has not fully disappeared, so the geopolitical premium could quickly return. Against this backdrop, analysts maintain a moderately positive view on short-term price dynamics, expecting that the combination of strong seasonal demand and declining inventories will continue to support the market.
Not an individual investment recommendation.