Crude oil futures closed at $66.52, marking a decline of $0.46 or -0.69%. During the session, prices peaked at $67.10 and dropped to a low of $66.25.<\/p>\n
The high price encountered resistance close to the underside of the broken trendline, suggesting a bearish trend. The next target on the downside is the 61.8% retracement level, positioned at $66.13, based on movements from the June low to the July high. Falling below this level would set sights on the swing low from July 7, located at $65.51.<\/p>\n
We\u2019re seeing that exact same technical breakdown, and frankly, we\u2019re not surprised. The failure to reclaim that broken trendline is a significant tell. It signals that the path of least resistance is now lower, and the market is respecting overhead supply. While the initial target sits at that key retracement level just above $66, the underlying fundamentals suggest this could be the start of a more meaningful move. This isn’t just a chart pattern; it’s a reflection of a tangible shift in the supply and demand balance.<\/p>\n
Let’s look at the demand side first, because that\u2019s where the cracks are most apparent. All eyes are on China, and the data is concerning. Their manufacturing PMI has been struggling to show convincing expansion, with recent figures hovering just over the 50 mark that separates growth from contraction. This isn’t the roaring post-COVID recovery everyone priced in. It\u2019s a sputtering engine, weighed down by a deepening property crisis that shows no sign of abating. That translates directly to weaker demand for industrial fuels and energy.<\/p>\n
Simultaneously, the supply picture is becoming overwhelmingly bearish. While OPEC+ maintains its production cuts, the effort is being almost single-handedly negated by the United States. We’ve just seen American crude production hit a new all-time high, roaring past 13.3 million barrels per day. The latest EIA reports confirm this gusher. This isn\u2019t a small uptick; it\u2019s a structural surplus that will weigh on the market for months. Historically, when non-OPEC supply, particularly from US shale, surges like this against a backdrop of tepid global demand, it\u2019s a recipe for lower prices. We saw this playbook run from 2014 to 2016, and the outcome was brutal for the bulls.<\/p>\n
Given this context, we believe traders should be positioning for further weakness. The move below the $66.13 level now seems more like a probability than a possibility. For those in the derivatives space, this is a prime opportunity to express a bearish view with defined risk. We are looking at buying put spreads. For instance, purchasing a near-month $65 put while simultaneously selling a $62.50 put could be an effective strategy. This approach limits the upfront premium cost and defines the maximum risk, while offering significant upside if the price breaks through that next support level mentioned by the analyst at $65.51 and heads toward the low $60s. The increasing supply from the U.S. and faltering demand from China create a fundamental pressure cooker, and the technicals are just starting to show the steam escaping.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Crude oil futures fell, facing resistance and targeting key retracement levels amid a continued bearish trend.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-26505","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/26505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=26505"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/26505\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=26505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=26505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=26505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}