Oil trading: Buy the dip or follow the trend?
By Paul Reid
The oil market has entered a turbulent phase. Prices have fallen sharply, and while official explanations focus on slowing demand and supply chain shifts, many traders believe there’s more going on. This environment is forcing oil trading strategies to evolve, especially as geopolitical and speculative narratives gain traction.
Politics behind oil trading today
Some experts suggest the United States and Saudi Arabia are intentionally driving prices lower to pressure economies like Russia and Iran. These countries rely heavily on oil exports, and sustained low prices could destabilize their financial systems. As traders look at oil charts, Brent crude support near $60 becomes a key level to watch. If supply remains high and demand doesn’t recover, more downside could follow.
OPEC+ signaling and its role in volatility
OPEC+ has made no move to reduce production. This may be a calculated tactic to apply pressure on smaller or non-member oil producers. Traders involved in oil trading can look at this as a signal of impending volatility. If the cartel suddenly changes course and announces a cut, it could trigger a sharp rally. Remaining responsive to these shifts is essential.
Is Saudi Arabia targeting US shale producers?
Another theory points to Saudi Arabia squeezing US shale oil firms, whose breakeven costs often hover around $55–$65. If prices stay below this level, production declines could follow. In this case, traders may see a reversal in WTI pricing. Watch for widening or narrowing in the Brent-WTI spread as a signal of market shifts.
Oil trading under extreme geopolitical tension
Geopolitical risks are always on the radar. If conflict or sabotage affects oil infrastructure, traders might see explosive price moves. These rare but significant events often reward those holding long positions or call options. Monitoring international headlines becomes part of every trader’s routine when the oil market feels tense.
Speculative narratives shaping oil trading decisions
Some believe the broader strategy is to weaken rivals economically while fueling domestic benefits from cheap energy. This theory is driving interest in oil-correlated forex pairs and ETFs, especially those connected to energy refiners. These assets can benefit in a low-input-cost environment while others suffer.
Oil trading strategies for uncertain markets
Price action matters. Traders are eyeing a potential breakout above $73 or a breakdown below $64 to determine direction. Technical tools like Fibonacci retracements and trendline analysis are crucial for validating moves. Hedging with options, testing theories using demo platforms, and trading correlated assets like natural gas can also create more stable trading frameworks.
When markets are unpredictable, tools matter. The Exness demo account helps traders explore oil trading scenarios with zero risk. The Exness Trade App keeps you connected to markets with live prices and alerts.
Conclusion: Oil trading is more than just supply and demand
Whether the oil market is being manipulated or simply reflecting market sentiment, one thing is clear: it’s not business as usual. Traders must stay sharp, question the headlines, and adapt quickly. Oil trading in 2025 demands not just technical skill, but a deep understanding of global politics and economic maneuvering.
Whether the oil market is being manipulated or simply reflecting market sentiment, one thing is clear: it’s not business as usual. Traders must stay sharp, question the headlines, and adapt quickly. Oil trading in 2025 demands not just technical skill, but a deep understanding of global politics and economic maneuvering.
Be sure to visit the Exness blog homepage daily for deep and unbiased insights into today’s trading news and narratives.
This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.
Author:
Paul Reid
Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.