Crude oil futures closed at $62.37, down by $1.30 or -2.04%. The day’s high was $63.80, while the low dropped to $62.24.

Sellers Take Over

Prices fell below the 200-hour moving average of $63.59 and the 100-hour moving average of $62.86. Earlier this week, prices rose above the 200-hour moving average due to geopolitical tensions in Russia and Israel. Now, sellers are taking control as prices stay below these averages. The next target is the low from September 8 at $61.94, followed by the September 5 low of $61.45. Sellers are firmly in charge as crude oil settles around $62.37, marking a drop of over 2%. The price has clearly fallen below both the 100-hour and 200-hour moving averages, which were previously supports. This technical weakness signals that the rally from earlier this week, spurred by geopolitical fears, has completely faded. This decline is backed by new data showing weaker global demand. Last week’s EIA report revealed a surprising increase in U.S. crude inventories of 3.1 million barrels, contrary to expectations for a decrease. Along with slower U.S. job growth reported for August 2025, this is lowering expectations for fuel use as we head into the fourth quarter.

Market Implications

On the supply front, the market is reacting to record U.S. crude output, which the EIA states has remained above 13.6 million barrels per day throughout the summer. The lack of deeper production cuts announced by OPEC+ at its August 2025 meeting is now heavily impacting the market. This surplus supply is significantly pushing down prices. For derivative traders, buying put options is becoming more appealing, especially those with strike prices below the key support level of $61.94. This strategy involves a defined risk for betting on a continued price drop toward the next target of $61.45, allowing traders to take advantage of the confirmed bearish momentum. Another strategy to consider is selling out-of-the-money call credit spreads. Since the price failed to break above the 200-hour moving average at $63.59, creating spreads with a short strike price above $64 could be a smart way to earn premium. This reflects a belief that upward movement is now largely restricted by technical resistance and bearish fundamentals. Create your live VT Markets account and start trading now.

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