West Texas Intermediate (WTI) crude prices fell more than 2% in early trading on Monday, pulling back from two-month highs reached at the end of last week. The decline was driven by a combination of profit-taking, expectations that two key Russian oil export terminals will resume operations after recent Ukrainian attacks, and reports that OPEC+ is preparing another production quota increase at its upcoming meeting.

From a technical perspective, crude has been consolidating within a range of $61.50 to $66 since the start of August. This range-bound trade reflects uncertainty on both the supply and demand fronts. On the demand side, the outlook remains mixed. China, the world’s second-largest oil consumer, is reportedly nearing capacity on its reserves amid sluggish domestic demand. Meanwhile, global economic data continues to flash uneven signals, with tariff disputes weighing heavily on consumer markets across Europe and Asia.

Recent upside in crude has been fueled largely by supply-side dynamics. U.S. oil rig counts have been trending lower in recent months, though last week saw a notable increase of seven rigs in the Baker Hughes Rig Count dataset.

Russia has also been facing refined product shortages, particularly in gasoline and diesel, forcing Moscow to impose temporary export restrictions. These curbs could ripple into Asian markets in the near term, tightening supplies and lending short-lived support to crude.

Still, the market’s attention is firmly fixed on OPEC+. According to an exclusive Reuters report, the group is preparing to raise its production target by an additional 137,000 barrels per day at next Sunday’s meeting. While this appears significant, actual output is still questionable to meet those levels. OPEC+ has consistently underproduced relative to its stated quotas in recent months, highlighting the gap between official targets and operational reality.

The latest pullback underscores the delicate balance between fragile demand conditions and persistent supply-side disruptions, a dynamic likely to keep crude prices volatile in the weeks ahead.

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