Saudi Arabia is asking OPEC+ to speed up their planned increase in oil production during the upcoming meeting in September. This request comes as crude oil prices are falling. The drop in prices is linked to a Bloomberg report and weak economic data from the United States. Together, these factors create a tough situation for oil markets.

Oil Prices on the Verge

Oil prices are on track to possibly fall to lower levels, potentially trading in the five-dollar range. This reflects changes in global oil supply and demand. OPEC+ is reportedly looking at increasing production amidst weak U.S. economic data, suggesting that crude prices are likely to decline. Derivative traders might want to consider bearish strategies, such as buying puts or selling call spreads on WTI or Brent futures, as these can benefit from falling prices in the coming weeks. This outlook is supported by recent economic data. The August 2025 non-farm payroll report revealed job growth slowed to 140,000, falling short of expectations. Additionally, the ISM Manufacturing PMI fell to 48.9, which means contraction. These figures indicate weakening energy demand from the largest consumer in the world. Moreover, this week’s EIA report showed an unexpected inventory increase of 2.5 million barrels, which adds to supply pressures and goes against usual seasonal trends. This fundamental data strengthens the case for oil prices to drop below their recent support levels, making a price in the high $50s for WTI more likely before October.

Oil Volatility and Trading Strategies

We witnessed a similar pattern in the summer of 2022 when recession fears outweighed tight supply, leading to a significant drop in oil prices from their peak. This situation demonstrated how quickly market sentiment can shift from concerns about supply to fears about demand. The current environment resembles that sell-off, suggesting that the downward trend could speed up. With the latest news, implied volatility in oil options is expected to rise, which may make buying puts more expensive. Because of this, we recommend strategies like put debit spreads to limit initial costs and manage risk. Additionally, selling out-of-the-money call credit spreads could be an effective way to earn premiums while betting that prices won’t rise past important resistance levels soon. Create your live VT Markets account and start trading now.

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