Crude's Rally Gains Momentum: Why $65 and $66 Matter as Trade Optimism and OPEC+ Dynamics Collide

The price of WTI crude oil has surged to $64.58 per barrel on June 6, 2025, marking a 1.91% daily gain and an 11.21% monthly rise, as traders bet on improving US-China trade relations and OPEC+ supply discipline. This upward momentum is now testing critical technical resistance levels—$65 and $66—that could determine the next phase of crude's trajectory. Let's dissect the fundamental and technical convergence fueling this move and what investors should watch next.

The Fundamental Backdrop: Trade Optimism and Supply Restraint

The recent rally is underpinned by two key dynamics: revived trade optimism and OPEC+ supply caution.

1. US-China Trade Talks: Optimism around ongoing negotiations has buoyed demand expectations. A potential easing of trade barriers could unlock pent-up global growth, particularly in Asia, where energy demand is highly sensitive to manufacturing activity. Analysts now project global oil demand growth of 730,000 b/d in 2025, a modest upward revision from earlier estimates.

2. OPEC+ Supply Management: Despite pressures to flood the market, OPEC+ has maintained a restrained approach, avoiding large-scale production hikes. This contrasts with 2024, when Saudi Arabia's output surge temporarily crushed prices. The cartel's discipline reflects a strategic focus on undermining U.S. shale profitability—a sector that requires prices above $65/bbl to break even.

3. Geopolitical Risks: Sanctions on Iran and Russia continue to crimp supply. While Iran's output has inched higher since the 2023 nuclear deal, U.S. reimposition of sanctions looms as a tailwind for prices. Meanwhile, Russia's resistance to deeper cuts keeps its exports near 9 million b/d, a level that balances its fiscal needs with global market stability.

Technical Breakouts Signal a Shift in Momentum

Crude's price action since June 2 has been nothing short of a bullish breakout. On June 2, prices surged through the $63.30 resistance, a level that had capped gains for months. This triggered a 6.2% weekly rally to $64.60, with the RSI now near neutral territory (49.9), suggesting bulls are gaining traction without overextending.

The $65–$66 zone is now the critical battleground. Here's why:
- $65 Resistance: A sustained close above this level would invalidate the bearish descending channel seen on weekly charts since 2022. It could unlock a path toward $66, a key psychological barrier and the 50-day moving average.
- $66 Resistance: Beyond this, prices could retest the $71 level seen earlier in 2025. A failure to hold $65, however, risks a drop to $60–$58, where long-dated support resides.

Convergence of Bulls: Fundamentals and Technicals Align

The $65–$66 zone is where fundamentals and technicals collide. Geopolitical risks (Iran/Russia) and OPEC's restraint provide a floor for prices, while trade optimism adds an upward bias. Traders are now pricing in the possibility of a sustained move above $65, with CFTC data showing speculative long positions at their highest since late 2023.

Investment Strategy: Positioning for the Next Move

Investors should consider three key plays:

1. Go Long WTI Futures:
2. Target: Aim for $66–$71 if $65 holds.
3. Stop-Loss: Below $63.30 to exit.

4. ****: Track this chart to confirm momentum.

5. Energy Equities:

6. Stocks like Chevron (CVX) and EOG Resources (EOG), which benefit from higher oil prices, are poised to outperform. Their valuations remain depressed compared to their 2022 highs, offering upside if crude sustains gains.

7. Monitor Inventory Data:

8. The API and EIA weekly reports (released every Tuesday/Wednesday) will confirm whether demand is outpacing supply. A drawdown in U.S. crude inventories—already at 2024 lows—would validate the bullish case.

Key Risk Factors

• OPEC+ Surprise Hikes: If the cartel boosts production beyond current quotas, it could derail the rally.
• Trade Deal Disappointment: A collapse in U.S.-China talks would crush demand optimism.
• Geopolitical De-escalation: A sudden easing of sanctions on Iran or Russia would flood markets with barrels.

Conclusion: A Crucial Crossroads for Crude

The $65–$66 zone is a make-or-break area for crude bulls. With OPEC+ holding the line and trade optimism percolating, the path of least resistance points higher. Traders who position ahead of this breakout—while keeping a close eye on inventory data—could capitalize on what could be a sustained rally into summer.

Stay tuned to the $65 level; if it holds, $66 and beyond await.