Market fears over heightened geopolitical tensions in the Middle East stimulated fears of possible supply disruptions, while falling supply from Venezuela supported the upside.

With the United States’ decision to withdraw from the Iran nuclear deal fueling speculation of tighter global supply, WTI Crude jumped to a yearly high above $72.80 in May.

Sentiment at one point was incredibly bullish towards Oil, thanks to ongoing supply disruptions and optimism over stronger global economic growth boosting demand.

However, concerns continued to linger in the background over the sustainability of the Oil rally, with investors even questioning if bulls were becoming heavily reliant on geopolitics.

Without geopolitical tensions in the equation, rising US Shale production remained a major threat to higher Oil prices.

It must be kept in mind that US Shale production has been relentless, with output surging to record levels in June at 3 million barrels per day.

With the US now exporting more than most OPEC countries can produce, but lagging behind Saudi Arabia and Iraq, this could spell trouble for Oil down the road.

There are a couple of key themes that may continue to impact Oil markets during the third quarter of this year.

Although prices received a boost after OPEC members decided to reach an agreement to increase production in July by almost 1 million barrels per day, the upside remains at risk.

Global trade tensions present a major threat for global economic growth, and this may negatively impact Oil prices as lower growth translates to less demand for commodities.

The bullish price action witnessed in Oil suggests that this risk has not been fully priced in; this is something that would need to be considered if a trade war becomes a reality.

With the primary dynamics driving markets still based around geopolitical tensions and rising production from US Shale, Q3 could be another volatile trading quarter for Oil.

Focusing on the technical picture, WTI Crude is unquestionably bullish on the weekly and daily time-frame.

The fact that prices have broken above the $70.00 suggests that bulls could be back in town with the next key level of interest at $80.00.

It will be interesting to see if fundamentals start impacting price action as prices venture towards $80.00.

It will be interesting to see if fundamentals start impacting price action as prices venture towards $80. There have been consistently higher highs and higher lows on the daily charts.

A solid daily close above $74 may open a path towards $75.15, $77.90 and $80.00, respectively.