WTI Crude Oil has dropped below $60, reaching a five-month low as geopolitical risk eases due to the Gaza peace deal. The US benchmark experienced a decline for the second consecutive week, trading around $59.80, after dipping to $59.21, marking a loss of over 2% in a day.<\/p>\n
This decrease comes as Israel and Hamas have agreed on the initial phase of the peace plan. From a technical perspective, WTI remains bearish, trading below key moving averages clustered in the $62.50-$64.50 zone. The Relative Strength Index (RSI) stands near 35, suggesting bearish momentum.<\/p>\n
Immediate support is at $59.50, with a break below potentially targeting $57.47, and this year\u2019s low around $55.00. Resistance sits at $60.00, offering a potential corrective path to $61.50, though recoveries may be hindered unless prices surpass mid-$62. The broader setup favours further price declines with repeated lower highs.<\/p>\n
WTI Oil, a type of high-quality crude oil, is influenced primarily by supply and demand, political situations, and OPEC decisions. Inventory reports by API and EIA can also affect oil prices with changes indicating supply-demand fluctuations. WTI Oil is traded in US Dollars, and the currency’s value can influence its cost.<\/p>\n
With WTI crude oil breaking below the psychological $60 mark, we see this as a clear signal of continued bearish momentum. The easing of geopolitical risk from the Gaza peace deal has removed a major pillar of price support. The market’s focus is now shifting back to fundamental supply and demand, which appears weak.<\/p>\n
This view is strengthened by recent data showing weaker global demand and ample supply. The latest Energy Information Administration (EIA) report published on Wednesday, October 8, 2025, showed a surprise crude inventory build of 2.1 million barrels, against expectations of a minor draw. Furthermore, China’s Caixin Manufacturing PMI for September came in at 49.5, indicating a contraction in factory activity and suggesting lower future oil consumption from the world’s largest importer.<\/p>\n
From a technical perspective, the path of least resistance is downwards. Prices are trading firmly below the key moving averages clustered around the $62.50-$64.50 area, which now acts as a heavy ceiling. The Relative Strength Index (RSI) sitting near 35 suggests there is still room for prices to fall before becoming technically oversold.<\/p>\n
For derivative traders, this environment favors strategies that profit from falling prices. We believe buying put options with strike prices near $57.50 or $55.00 could be a direct way to capitalize on a continued slide toward those support levels. Shorting WTI futures contracts is another direct approach, though it carries higher risk if the market suddenly reverses.<\/p>\n
For a more risk-defined strategy, traders might consider a bear put spread. This involves buying a put option at a higher strike price and selling another at a lower strike price to lower the upfront cost and cap potential losses. Selling out-of-the-money call options or implementing bear call spreads with a ceiling around the $62.50 resistance zone could also be effective for generating income while betting that prices will not recover in the near term.<\/p>\n
Looking back, we remember the sustained period of prices above $80 through much of 2024, driven by supply concerns and stubborn inflation. The current break below $60 represents a significant shift in market structure. Unless there is a surprise production cut from OPEC+ or a new geopolitical flare-up, we anticipate sellers will remain in control for the coming weeks.<\/p>\n
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