Insights 
VT 
Recent Oil Inventory Data
Recent data on oil inventories shows a notable increase in crude oil stocks. US crude oil inventories rose by 3.036 million barrels, contrary to the anticipated decrease of 0.275 million barrels.
With crude oil settling at its lowest point since early June 2025, we see sellers are firmly in control of the market. The price at $62.65 is decisively below key technical levels like the 100-day average, suggesting the path of least resistance is to the downside. Traders should see this as a clear signal that the recent bearish momentum has strength.
The surprise build of over 3 million barrels in US inventories is a significant bearish factor, especially when the market expected a draw. This goes against the usual trend for mid-August, when summer driving demand typically depletes stockpiles, as we saw with the large inventory draws during this same period in 2023 and 2024. This fundamental shift signals that demand may be weaker than previously thought.
Key Levels to Watch
Looking at the global picture, ongoing concerns about slowing economic activity in China are weighing on demand expectations. Recent data from earlier this month showed their manufacturing sector is still struggling to gain traction, which dampens the outlook for a major source of oil consumption. This wider economic weakness provides a strong reason for the current price drop.
For the coming weeks, we believe buying put options with strike prices near the $60 psychological level could be a prudent strategy. This allows for participation in further downside while defining risk. Bear put spreads could also be considered to lower the initial cost of the position.
The key level to watch is $65.27, which represents the high of the recent swing area. A sustained break above this price would indicate that buyers are wrestling back control and would serve as a signal to exit bearish positions. Until then, any rallies toward the $64 level should be viewed as potential selling opportunities.
We must also monitor the Atlantic hurricane season, which has been relatively calm so far this year. Any major storm threatening production in the Gulf of Mexico could cause a rapid price spike, acting as a primary risk to any short position. Therefore, keeping a close eye on weather forecasts is essential for risk management.
