Crude oil prices have been falling since early August due to worries about economic growth linked to a weaker-than-expected Non-Farm Payroll report. The situation worsened as OPEC+ increased oil production, and concerns eased about US sanctions on Russia, especially with a possible ceasefire expected before the Trump-Putin summit in Alaska.

Market Dynamics

The market is feeling the effects of higher supply and lower demand, even with upcoming Federal Reserve rate cuts. If the summit produces positive results, it could help stabilize prices, bringing focus back to rate cuts that could drive demand up. Currently, crude oil is trading below the crucial $64.00 support level, and if sellers remain active, prices could drop to $55.00. On the daily chart, it’s important to maintain a price above $64.00 to shift from a bearish to a bullish trend, with a target of reaching the $72.00 resistance level. The 4-hour chart shows a slight downward trend, where sellers are likely to act near the $64.00 resistance, while buyers might look for chances to push prices higher. On the 1-hour chart, sellers are focusing on resistance levels, while buyers are looking for breakout opportunities. Upcoming US economic reports and the Trump-Putin summit could shape market direction. Crude oil has been dropping since early August, mainly due to fears of slowing growth. The Non-Farm Payrolls report released on August 1, 2025, showed a gain of only 145,000 jobs, which was below expectations and raised concerns about future demand. This has created a bearish sentiment over the past two weeks. On the supply side, OPEC+ has confirmed its production increase of 400,000 barrels per day for August. Additionally, yesterday’s EIA report revealed a surprising rise in U.S. crude inventories of 2.1 million barrels, against expectations of a decrease. This combination of increased supply and reduced demand keeps sellers in control of the market.

Market Outlook

The main focus now is the Trump-Putin summit in Alaska tomorrow, where traders are hoping for a possible ceasefire and relaxation of sanctions on Russia. This potential increase in supply has already contributed to recent price drops. The market is heavily influenced by these supply factors, alongside upcoming Federal Reserve rate cuts. From a trading standpoint, $64.00 is the key level to watch. It has shifted from being a price floor to a ceiling. As long as prices stay below this resistance, the most likely move is downwards, making this area a strategic point for bearish positions. Traders should think about using put options or short futures contracts to target a move towards $55.00 in the upcoming weeks. A stop-loss just above the $64.00 resistance would help manage risk for this strategy. The downward trendline on the 4-hour chart reinforces confidence for sellers. However, we need to be ready for a reversal if the summit results are favorable, leading to a “sell the rumor, buy the fact” scenario. A strong break above the $64.00 resistance would indicate that bearish momentum is fading, suggesting it might be a good time to consider call options or long positions, with an initial target around the $72.00 resistance level. A positive outcome from the summit would shift market focus back to fundamentals, especially the anticipated Fed rate cuts. Currently, there is over a 90% chance of a rate cut in September, which would likely boost economic activity and oil demand. This potential bullish catalyst should not be overlooked if geopolitical tensions ease. Create your live VT Markets account and start trading now.

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