Overview: Crude Prices Rise After Five-Day Decline

Global oil markets saw a meaningful rebound on August 7, 2025, as stronger-than-expected U.S. demand data helped prices bounce back after five consecutive days of losses. Brent crude rose above $85 per barrel while WTI hovered near $81, fueled by signs of steady refinery activity and gasoline consumption in the United States.

The rally, however, remains fragile as macroeconomic uncertainty, international sanctions, and concerns about global supply chains continue to cast shadows over the energy sector. Traders remain cautious ahead of key inflation data and further geopolitical developments.

U.S. Demand Provides Crucial Support

The latest data from the U.S. Energy Information Administration (EIA) showed that gasoline inventories fell more than expected last week, reflecting robust domestic driving demand during the summer season. Refineries operated at above 93% of capacity, indicating sustained throughput despite macroeconomic headwinds.

Additionally, jet fuel consumption—often a lagging indicator of business travel and tourism—has returned to near pre-pandemic levels, particularly across major U.S. hubs. This surge in transportation fuel demand has helped offset some of the bearish sentiment that had gripped crude markets in recent days.

“We’re seeing a fundamental demand floor under oil,” said Jessica Morgan, senior energy analyst at ClearPath Analytics. “Even with softer manufacturing activity, transportation remains a strong pillar for crude consumption.”

 Sanctions Uncertainty Keeps Traders on Edge

Despite the bullish demand signals, global crude markets remain volatile due to growing uncertainty around sanctions enforcement, particularly involving Russian and Iranian exports. New reports suggest that the U.S. Treasury may tighten restrictions on “shadow fleet” vessels bypassing sanctions, which could squeeze supply in the coming months.

Meanwhile, European nations are pushing for tougher price caps on Russian crude, a move that could further strain the already complex global oil logistics network. Traders are also watching for potential retaliatory responses from oil-producing nations, including threats of supply cuts.

These geopolitical risks, while not yet fully priced in, have introduced a layer of hesitancy in speculative positioning, keeping futures volume in check despite the rebound.

OPEC+ Production Remains Steady but Non-Committal

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) continue to produce near recent targets but have avoided making firm commitments on future output changes. Saudi Arabia’s unilateral 1 million bpd cut remains in effect, but recent comments from officials suggest the Kingdom may ease restrictions if prices stabilize above $85.

Russia, on the other hand, appears to be increasing exports quietly, possibly through backchannels and via blended shipments, making global oil flows increasingly opaque.

Analysts warn that a lack of clear communication from major producers adds to market confusion, particularly as demand signals fluctuate between strong transportation needs and weaker industrial activity in China and Europe.

 Technical Analysis: Key Levels to Watch

From a technical standpoint, Brent crude bounced off the $82.50 support zone, with immediate resistance now sitting at the $86.20–$87.00 range. A sustained breakout above that level could open the path toward $90.

WTI, meanwhile, appears to be forming a double bottom near $79.50, a level that has historically held as a short-term floor. Momentum indicators such as RSI and MACD have turned neutral, suggesting a potential consolidation period before the next directional move.

 Investor Sentiment Mixed

While energy traders welcomed the rebound, many institutional investors remain underweight energy stocks, preferring to rotate into tech and industrials amid broader equity strength.

“The macro backdrop is still very tricky,” noted Arjun Patel, portfolio manager at Horizon Asset Partners. “While U.S. demand is real, global oil still faces downside risks if growth continues to slow in Europe and Asia.”

That said, rising oil prices could revive interest in upstream energy firms, especially those with low-cost basins and strong dividend yields.

 Conclusion

The rebound in oil prices on August 7 highlights the importance of U.S. demand in maintaining market stability. However, ongoing geopolitical risk, sanctions complexity, and mixed OPEC+ signals mean that the recovery may remain choppy.

With energy markets at the crossroads of economic resilience and geopolitical tension, traders are bracing for increased volatility through the remainder of Q3.