Trading Update 29th June 2025

Brent Crude Dips and Rallies: What Moved Oil Markets This Week?

Energy stocks moved broadly in line with Brent crude, with notable swings across both major producers and smaller exploration firms. Blue-chip oil giants such as BP and Shell saw their share prices rise approximately 4% during Tuesday and Wednesday’s rally, supported by stronger demand outlooks. However, by the end of the week, they gave back some of those gains—slipping around 3%—as concerns about Chinese lockdowns re-emerged.

The impact was even more pronounced among smaller, high-beta oil companies. US-based explorers like Oasis Petroleum initially surged nearly 8% on early optimism, only to retreat by around 5% later in the week. Investor sentiment in the energy space was highly reactive, driven by geopolitical risks and economic headlines.

Energy-focused exchange-traded funds (ETFs) such as the iShares U.S. Oil & Gas Exploration & Production ETF (IEO) experienced similar volatility. It gained roughly 3% mid-week before ending the week essentially flat. Traders actively used energy equities to hedge crude exposure or to pursue correlation-based strategies across oil and stock markets, particularly when directional conviction was limited.

Political Drivers and Global Supply Disruptions

Geopolitical uncertainty continued to weigh on oil market dynamics throughout the week. Traders remained acutely focused on several flashpoints:

• Drone attacks near southern Iraqi oil pipelines led to a brief price spike of nearly 2% on an intraday basis. While actual infrastructure damage was minimal, concerns about broader regional instability increased risk premiums across the energy complex.

• In the Black Sea region, renewed shelling around Ukrainian ports disrupted both crude and grain shipments. This led to a short-lived rise in Brent above $78 per barrel, underscoring the market’s sensitivity to conflict zones in Eastern Europe.

• Meanwhile, Saudi Arabia reaffirmed its commitment to strict OPEC+ output controls heading into Q3. This provided some counterbalance to rising US shale supply expectations, with Riyadh’s rhetoric offering mild bullish support for prices.

These events highlighted how headline-driven risks can trigger sharp, short-term price fluctuations. For traders, it was a week that rewarded close monitoring of global newsfeeds and disciplined risk management. Maintaining tight technical stop levels proved essential, particularly around the upper and lower bounds of Brent’s current trading range.

Macro Trends & Currency Crosswinds

Broader macroeconomic forces also played a significant role in influencing the direction of the oil market this week. A strengthening US dollar, fuelled by hawkish language from the Federal Reserve, applied downward pressure on dollar-denominated commodities mid-week. As the US Dollar Index climbed, Brent crude briefly edged lower, reflecting the inverse relationship between the greenback and energy prices.

However, late-week economic data from China helped restore confidence. Positive industrial output and retail sales figures reassured markets, leading to a renewed risk-on mood that drove Brent back toward the middle of its trading band.

In bond markets, US two-year Treasury yields rose above 5%, reinforcing the idea of prolonged higher interest rates. Typically, higher yields act as a drag on commodities due to increased opportunity costs. Yet in this case, robust demand signals overrode those concerns, highlighting the importance of economic fundamentals in price discovery during times of rate uncertainty.

Spread Betting Insights & Trading Opportunities

For active traders and spread bettors, the past week’s conditions offered a rich environment for tactical plays. Volatility worked in favour of short-term strategies, mainly when tight limits and timely exits were used effectively. A US$3 intraday range allowed for profitable scalping in both directions, provided stops were carefully placed.

Headline risk was a constant theme. Traders who set alerts for developments in the Middle East or Eastern Europe were able to act swiftly on fast-moving news. These moments of volatility delivered high reward potential, albeit with increased exposure to whipsaws and reversals.

Many turned to correlation trades, pairing crude futures with oil and gas equities. When Brent and companies like BP or Shell diverged, short-term arbitrage opportunities often presented themselves. This cross-asset strategy helped manage directional risk while still allowing traders to stay active in the market.

It was also a week that highlighted the importance of robust stop placement. Sudden reversals triggered by news flashes caused multiple stop-loss cascades. Keeping stops just outside the US $75–80 per barrel range helped avoid getting prematurely stopped out.

Outlook and Trading Strategy for the Week Ahead

Brent crude closed the week near US$77 per barrel, remaining firmly within its well-defined trading corridor. For now, the US$80 resistance level and US$75 support zone continue to act as key decision points. A clean break above $80 could reflect renewed optimism about global demand, while a drop below $75 may signal further concern over China’s recovery and global growth.

Key data and events to watch in the coming week include:

• Chinese Economic Indicators – Further updates on retail, production, and lockdowns could sway demand expectations.

• Middle East Security Developments – Any disruptions near major oil routes may inject new volatility.

• OPEC+ Policy Statements – Watch for hints about Q4 production plans or quota adjustments.

• US Federal Reserve Speeches – If the Fed doubles down on its hawkish outlook, expect renewed dollar strength.

Trading Tip: Blend technical chart levels with real-time geopolitical headlines for best results. Flexibility is key. Be prepared to adjust your bias based on momentum signals, news catalysts, and breakout confirmation.

Keep an eye on the oil prices here.