Crude oil prices fell on Friday due to a disappointing US Non-Farm Payroll (NFP) report, raising concerns about economic growth. While the data wasn’t as weak as it appeared, the market had expected better results, leading to a swift adjustment in expectations. OPEC+ announced an increase in oil production by 547,000 barrels per day for September, effectively ending previous production cuts. The market had anticipated this move, resulting in little change to oil prices.

Economic Data Focus

The spotlight is now on economic data and the Federal Reserve, which will influence future growth predictions. Tariffs have stabilized within a 10-20% range, with most effects already factored into prices. Expectations for growth and inflation are rising, as the Fed continues its easing policy, supporting a price range of $60-$80 for oil. Currently, crude oil is trading between the support level of $64.00 and the resistance level of $72.00. On the 4-hour chart, crude oil briefly climbed above $69.00 before pulling back. Buyers are looking to enter the market near support levels, while sellers are focused on resistance. On the 1-hour chart, a swing high at $67.80 may act as resistance, with sellers potentially targeting this level for a price drop. This week, we will see the US ISM Services PMI and Jobless Claims figures.

Market Sensitivity

Friday’s market reaction illustrated that crude oil is sensitive to signs of economic slowdown. The decline following the August 1st Non-Farm Payroll report, which showed an increase of +155,000 jobs versus an expected +180,000, highlighted how quickly bullish positions can shift. This slight miss has raised concerns about growth for the upcoming weeks. OPEC+’s weekend decision to increase September production was expected. This move, reversing voluntary cuts from 2023, was already anticipated by the market months earlier. Thus, we should not expect a significant price reaction to this supply news going forward. With supply adjustments clarified and the trade tariff situation seemingly stable within a 10-20% range, we need to shift our focus. The main factors influencing oil prices will now be upcoming economic data and the Federal Reserve’s actions. The Fed’s guidance from its July 2025 meeting, which suggested a pause after keeping rates at 4.75%, still indicates a leaning towards easing. This outlook should help stabilize prices, as the potential for rate cuts supports growth expectations. However, there isn’t enough confidence for a big breakout, so we expect the market to remain range-bound. We anticipate crude oil will continue trading between $60 and $80 in the near future. For traders who are bullish, the strategy should be to wait patiently for prices to approach the strong support zone around $64.00. This area offers a solid entry point for buying call options or selling cash-secured puts with a defined risk below that level. A target for this trade would be a move towards the $72.00 resistance. Traders with a bearish outlook should view resistance levels as their chance to act. The recent swing high at $67.80 presents a short-term selling opportunity, possibly through purchasing puts or establishing bear call spreads. A confirmed break below $64.00 would be a stronger bearish signal, potentially opening the door for a drop towards $55.00. This week’s data will be crucial for testing our range-bound prediction. We will closely monitor the US ISM Services PMI tomorrow, as a strong report could push oil prices toward resistance. On Thursday, the latest US Jobless Claims data will provide more insight into the labor market and its impact on demand. Create your live VT Markets account and start trading now.

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