Crude oil futures closed at $62.37, a decrease of $1.30 or -2.04%. The high of the day reached $63.80, while the low fell to $62.24.
Sellers Regain Control
The price dipped below its 200-hour moving average at $63.59 and the 100-hour moving average at $62.86. Earlier in the week, prices rose above the 200-hour moving average due to geopolitical risks in Russia and Israel.
Now, downward pressure is present as sellers regain control below these averages. The next target is the low from September 8 at $61.94, with the following target being the September 5 low of $61.45.
We are seeing sellers take firm control as crude oil settles around $62.37, a drop of over 2%. The price has decisively broken below both its 100-hour and 200-hour moving averages, which were previously acting as support. This technical weakness suggests the recent rally, which we saw earlier this week based on geopolitical fears, has completely faded.
This move lower is supported by fresh fundamental data showing weakening global demand. Last week’s report from the EIA showed a surprise build in U.S. crude inventories of 3.1 million barrels, against expectations of a draw. This, combined with slower U.S. job growth reported for August 2025, is reducing expectations for fuel consumption heading into the fourth quarter.
Market Implications
On the supply side, the market is absorbing news of record U.S. crude output, which the EIA reported has now sustained above 13.6 million barrels per day through the summer. Looking back, the failure of OPEC+ to announce deeper production cuts at its August 2025 meeting is now weighing heavily on the market. This abundance of supply is putting significant pressure on prices.
For derivative traders, this environment makes buying put options increasingly attractive, especially those with strike prices below the key $61.94 support level. This strategy offers a defined risk to bet on a continued price decline toward the next target of $61.45. We see this as a way to capitalize on the confirmed bearish momentum.
Another strategy to consider is selling out-of-the-money call credit spreads. With the price failing at the 200-hour moving average near $63.59, establishing spreads with a short strike price above $64 could be a prudent way to collect premium. This reflects a belief that upside potential is now severely limited by both technical resistance and bearish fundamentals.
