Summer demand subsides and Russian crude oil returns to the market, which is bearish for crude oil.
2025-08-28 22:43:04
WTI crude oil futures came under downward pressure on Thursday, retreating from recent gains as traders weighed seasonal demand trends against the evolving geopolitical situation.
OPEC supply moves give way to seasonal demand decline
Oil prices, which had rebounded on Wednesday on upbeat inventory data, are now falling again as traders anticipate weaker U.S. fuel demand after the Labor Day holiday. The end of the summer driving season typically signals a slowdown in demand, with gasoline consumption already falling short of expectations.
"Any short-term factors supporting oil prices are gradually disappearing," said John Evans of PVM, citing a seasonal drop in demand and the resumption of crude supplies from Russia's Druzhba pipeline as the main reasons.
The Friendship pipeline, which supplies Russian crude oil to Hungary and Slovakia, has resumed operations after a brief outage due to a Ukrainian drone attack inside Russian territory. The resumption of supply from the pipeline added to pressure on oil prices, partially offsetting optimism from Wednesday's unexpected drop in U.S. crude oil inventories, which fell by 2.4 million barrels, exceeding expectations for a 1.9 million barrel drop.
Geopolitical tensions escalate, but market impact is limited
While geopolitical risks remain elevated, their impact on crude oil prices is currently limited. Russia and Ukraine continue to escalate attacks on energy infrastructure, with recent Russian drone strikes disrupting natural gas transportation networks in six Ukrainian regions. However, these incidents have yet to cause substantial supply disruptions.
Meanwhile, traders are closely watching India's response to the U.S. tariffs. Despite U.S. pressure on New Delhi to curb Russian crude imports, India is expected to continue purchases, which could ease some of the global supply concerns.
Crude oil price forecast: Below key resistance level, short-term bias bearish
(WTI crude oil daily chart source: Yihuitong)
With summer demand fading, Russian supply recovering, and resistance levels holding firm, the short-term crude oil price forecast is bearish.
OPEC supply moves give way to seasonal demand decline
Oil prices, which had rebounded on Wednesday on upbeat inventory data, are now falling again as traders anticipate weaker U.S. fuel demand after the Labor Day holiday. The end of the summer driving season typically signals a slowdown in demand, with gasoline consumption already falling short of expectations.
"Any short-term factors supporting oil prices are gradually disappearing," said John Evans of PVM, citing a seasonal drop in demand and the resumption of crude supplies from Russia's Druzhba pipeline as the main reasons.
The Friendship pipeline, which supplies Russian crude oil to Hungary and Slovakia, has resumed operations after a brief outage due to a Ukrainian drone attack inside Russian territory. The resumption of supply from the pipeline added to pressure on oil prices, partially offsetting optimism from Wednesday's unexpected drop in U.S. crude oil inventories, which fell by 2.4 million barrels, exceeding expectations for a 1.9 million barrel drop.
Geopolitical tensions escalate, but market impact is limited
While geopolitical risks remain elevated, their impact on crude oil prices is currently limited. Russia and Ukraine continue to escalate attacks on energy infrastructure, with recent Russian drone strikes disrupting natural gas transportation networks in six Ukrainian regions. However, these incidents have yet to cause substantial supply disruptions.
Meanwhile, traders are closely watching India's response to the U.S. tariffs. Despite U.S. pressure on New Delhi to curb Russian crude imports, India is expected to continue purchases, which could ease some of the global supply concerns.
Crude oil price forecast: Below key resistance level, short-term bias bearish
(WTI crude oil daily chart source: Yihuitong)
With summer demand fading, Russian supply recovering, and resistance levels holding firm, the short-term crude oil price forecast is bearish.
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