Brent crude is having difficulty staying above $71, raising worries about possible price drops. Analysts warn that if the support level at $63 gets broken, further losses could occur. Recent efforts to break through the 200-day moving average (DMA) at $71 have not been successful, leading to a decline in a short-term upward trend. Past attempts to exceed this moving average have resulted in longer price downturns.

Ongoing Challenges

The ongoing struggle to break the $71 barrier could push prices lower. Key support levels are now seen at $63.30 and $63.00, with another point at $58.40. This information may contain forward-looking statements and is not intended as advice for buying or selling. It’s essential to conduct thorough personal research before making any investment choices. Errors may exist in the content, which does not guarantee accuracy or reliability. The author is not accountable for the outcomes of actions based on this information.

Investment Advice

This article does not provide personal investment advice or guarantees. The author and the platform are not registered investment advisors and are not responsible for any direct or indirect damages. Brent crude’s struggle to break the $71 price level is significant. This ongoing failure shows that upward momentum has weakened for now. Traders should be cautious as the risk of a price drop is increasing in the near term. This bearish outlook is supported by recent fundamental data released in the first week of August 2025. On August 6, the U.S. Energy Information Administration announced an unexpected increase in crude oil inventories, indicating that supply is exceeding demand. This surplus puts added pressure on an already weak price. Global demand is also a concern, particularly with recent reports from China. On August 9, it was revealed that Chinese factory activity shrank for the second consecutive month. As the world’s largest oil importer, any slowdown in China’s economy directly affects global crude demand. For those trading derivatives, it might be wise to consider bearish strategies. Traders are looking into buying put options with strike prices near the critical support level of $63, which would yield profits if prices dip below this level in the coming weeks. Another strategy is to focus on the $71 resistance. Selling call options or setting up call credit spreads with strike prices above $71 could be effective. This strategy hinges on the belief that Brent won’t break above this key level. We’ve seen similar price patterns in the past, especially when examining late 2024. At that time, a failure to surpass a key moving average led to a significant price correction. This past trend indicates that the current weakness should be taken seriously as a warning of a potential larger decline towards $63 or even $58. Create your live VT Markets account and start trading now.

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