Crude oil futures have risen by eight cents, reaching $63.96. The highest price today was $64.44, while the lowest was $63.02. Recently, prices have stabilized, bringing the 100-hour moving average closer to the current price. This average is now at $64.49 and is trending downwards. If prices rise above this average, it could signal a positive short-term change, marking the first break above it since August 1.

Crude Oil Price Consolidation

Crude oil prices are currently stabilizing, sitting just below $64 a barrel. A key focus is the 100-hour moving average at $64.49. If prices move above this, it would mark the first break since early August and could indicate a short-term price increase. This price movement coincides with new data from the Energy Information Administration, which showed another increase in U.S. crude inventories. With domestic production remaining close to record levels set in late 2024, supply pressure is high. This means prices may only rise if demand improves. On the demand side, we see signs of slowdown in important markets. Manufacturing data from China has been weak for two months, and Europe’s economic growth is sluggish. Low demand during this summer driving season has also kept prices in check. For traders, this creates an interesting situation for the coming weeks. While the fundamentals look weak, rumors about possible OPEC+ production cuts in September could spark a rally if prices break the $64.49 level. Buying call options with short expirations might be a way to manage risk while betting on a potential price rise.

Trading Strategies in Current Market

On the other hand, if prices do not break above the moving average, it could confirm a downward trend. Given the high inventories and weak demand outlook, failing this level might be a signal to buy put options. This could safeguard against a drop back to lower summer prices from 2025. We should consider the price volatility seen in past years, like the spikes after geopolitical events in 2022. Today’s market is different, driven more by economic trends than by supply shocks. This stable environment may favor strategies that benefit from price consolidation if this behavior continues. Create your live VT Markets account and start trading now.

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