Crude oil prices have been declining since early August due to growth concerns linked to a softer-than-expected Non-Farm Payroll report. The situation worsened with OPEC+’s increase in oil production and moderated fears regarding US sanctions on Russia as a potential ceasefire is anticipated ahead of the Trump-Putin summit in Alaska.
Market Dynamics
Higher supply and lower demand continue to affect the market, despite upcoming Federal Reserve rate cuts. Positive outcomes from the summit could stabilise prices, focusing attention on rate cuts, which may boost demand. Crude oil is trading below the key 64.00 support zone, potentially dropping to the 55.00 level if sellers continue to influence the market.
On the daily chart, maintaining a price above the 64.00 level is crucial for shifting from a bearish to a bullish trend, targeting a rise to the 72.00 resistance. The 4-hour chart shows a minor downward trendline, with sellers poised to act near this and the 64.00 resistance, while buyers may seek opportunities for upward market movements.
On the 1-hour chart, sellers target rejections at the trendline and resistance, whereas buyers eye potential breakouts. Upcoming US economic reports and the Trump-Putin summit could influence future market directions.
We’ve seen crude oil fall since the beginning of August, driven by fears of slowing growth. The Non-Farm Payrolls report on August 1st, 2025, showed a gain of just 145,000 jobs, which missed forecasts and made the market nervous about future demand. This sentiment has set the bearish tone for the past two weeks.
On the supply side, OPEC+ went ahead with its expected production increase of 400,000 barrels per day for August. More importantly, yesterday’s weekly EIA report showed a surprise build in U.S. crude inventories of 2.1 million barrels, against expectations of a draw. This combination of higher supply and weakening demand signals has kept sellers in control.
Market Outlook
The major focus now is the Trump-Putin summit in Alaska tomorrow, which has traders anticipating a potential ceasefire and an easing of sanctions on Russia. This possibility of more supply entering the market has been priced in, contributing to the recent drop in prices. The market is weighing these supply factors heavily, even with upcoming Federal Reserve rate cuts on the horizon.
From a trading perspective, the key level is the $64.00 mark, which was previously a floor for prices and is now acting as a ceiling. As long as the price stays below this resistance, the path of least resistance is downwards. This makes the area a strategic entry point for bearish positions.
Derivative traders should consider put options or short futures contracts to target a move towards the $55.00 handle in the coming weeks. A stop-loss just above the $64.00 resistance would provide a clear and defined risk for this strategy. The downward trendline on the four-hour chart adds another layer of confidence for sellers.
However, we must be prepared for a reversal if the summit outcome is positive, creating a “sell the rumor, buy the fact” scenario. A decisive break back above the $64.00 resistance would signal that the bearish momentum is fading. This would be the trigger to consider call options or long positions, with an initial target near the $72.00 resistance level.
A positive resolution from the summit would shift the market’s attention back to fundamentals, particularly the expected Fed rate cuts. The market is currently pricing in a greater than 90% chance of a rate cut in September, which would stimulate economic activity and boost demand for oil. This underlying bullish catalyst should not be ignored if the geopolitical overhang is removed.
