WTI Crude Oil has fallen below $60, hitting a five-month low as concerns over global conflicts ease following the Gaza peace deal. The US benchmark has declined for two weeks straight, trading around $59.80 after dropping to $59.21, showing a loss of over 2% in one day. This drop occurs as Israel and Hamas begin the first phase of their peace agreement. On the technical side, WTI is trending down, remaining below important moving averages between $62.50 and $64.50. The Relative Strength Index (RSI) is near 35, indicating bearish momentum.

Immediate Support and Resistance Levels

Support is currently at $59.50. A break below this level may target $57.47, with this year’s low around $55.00. Resistance is at $60.00, which could lead to a potential rise towards $61.50. However, recovery could struggle unless prices exceed the mid-$62 range. Overall, the trends indicate further price drops with ongoing lower highs. WTI Oil, a type of high-quality crude oil, is affected mainly by supply and demand, political factors, and OPEC decisions. Inventory reports from the API and EIA can also impact prices by reflecting changes in supply and demand. WTI Oil is traded in US dollars, so shifts in currency value can affect its price. With WTI crude oil breaking below the influential $60 mark, it signals continued bearish movement. The easing of geopolitical tensions from the Gaza peace deal has weakened a major support factor for prices. The market is now refocusing on fundamental supply and demand, which seems weak. Recent data supports this view, showing lower global demand and enough supply. The latest Energy Information Administration (EIA) report from October 8, 2025, revealed a surprising inventory increase of 2.1 million barrels, contrary to expectations for a slight decrease. Additionally, China’s Caixin Manufacturing PMI for September was 49.5, indicating a slowdown in factory activity and suggesting lower future oil consumption from the world’s largest importer.

Derivative Trading Strategies

From a technical standpoint, the trend is downward. Prices are firmly below key moving averages between $62.50 and $64.50, which now act as strong resistance. The RSI close to 35 indicates there is still potential for prices to drop before hitting oversold conditions. For derivative traders, this situation favors strategies that profit from falling prices. Buying put options with strike prices near $57.50 or $55.00 could be a direct way to benefit from a continued downward trend. Shorting WTI futures contracts is another option but carries higher risk if the market suddenly changes direction. For a more controlled risk strategy, traders may consider a bear put spread. This means buying a put option at a higher strike price while selling another at a lower strike price to reduce upfront costs and limit potential losses. Selling out-of-the-money call options or implementing bear call spreads around the $62.50 resistance zone could also be effective for generating income while betting that prices won’t recover soon. Reflecting on past trends, we remember prices consistently above $80 throughout most of 2024 due to supply concerns and persistent inflation. The recent drop below $60 marks a significant change in the market. Unless OPEC+ announces unexpected production cuts or new geopolitical issues arise, we expect sellers to remain dominant in the weeks to come. Create your live VT Markets account and start trading now.

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