Phillips 66 Plunges 2.65% Amid Energy Sector Turbulence: What’s Fueling the Selloff?

Summary
• Phillips 66 (PSX) trades at $130.29, down 2.65% from its previous close of $133.84
• Intraday range spans $129.67 to $133.84, reflecting sharp volatility
• Sector peers like Exxon Mobil (XOM) also decline, hinting at broader energy sector pressure

Phillips 66’s sharp intraday drop has drawn attention as the stock trades near its 52-week low of $91.01. The Integrated Oil & Gas sector faces headwinds from mixed energy market signals, regulatory scrutiny, and production dynamics. With PSX’s price action diverging from its short-term bullish trend, traders are recalibrating positions ahead of key support levels.

Energy Sector Volatility Drives PSX Downward
The Integrated Oil & Gas sector is under pressure as broader energy market dynamics shift. Recent news highlights record U.S. LNG exports, declining rig counts, and regulatory uncertainty in exploration projects. While U.S. crude production hit a record 13.58 MMbbl/d in June, the sector faces near-term profit compression from falling oil prices and rising production costs. Phillips 66’s technical indicators—RSI at 89.38 (overbought) and MACD histogram at 1.23—suggest a reversal after a short-term bullish trend. The stock’s breakdown below the 30-day moving average of $125.05 amplifies bearish momentum.

Integrated Oil & Gas Sector in Retreat as XOM Mirrors PSX’s Slide
Exxon Mobil (XOM), the sector’s largest player, trades down 2.53%, mirroring PSX’s decline. Both stocks face similar headwinds from falling oil prices and regulatory scrutiny in exploration projects. Plains All American’s $1.57B acquisition of EPIC pipeline stakes and EQT’s LNG expansion efforts highlight sector consolidation but fail to offset broader weakness. PSX’s 52-week range of $91.01–$140.59 contrasts with XOM’s narrower $115–$150 range, suggesting PSX’s volatility reflects deeper structural concerns.

Options Playbook: Capitalizing on PSX’s Volatility with Strategic Puts
• MACD: 2.60 (Signal Line: 1.37, Histogram: 1.23)
• RSI: 89.38 (overbought)
• Bollinger Bands: Upper $135.79, Middle $125.15, Lower $114.50
• 200-day MA: $120.58 (below current price)

PSX’s technicals signal a potential reversal after a sharp overbought RSI and breakdown below key moving averages. Key support levels at $124.23 (200D MA) and $123.32 (30D support) are critical for near-term direction. The stock’s high implied volatility (IV) in options suggests market anticipation of further swings. Two top options for bearish exposure:

• PSX20250912P130 (Put, $130 strike, 2025-09-12):
- IV: 24.68% (moderate)
- LVR: 66.83% (high leverage)
- Delta: -0.465 (sensitive to price moves)
- Theta: -0.049 (moderate time decay)
- Gamma: 0.0746 (high sensitivity to price swings)
- Turnover: $195
- Payoff (5% downside): $4.85 per contract
- This put offers high leverage and gamma to capitalize on a potential breakdown below $130.

• PSX20250912P131 (Put, $131 strike, 2025-09-12):
- IV: 19.89% (low)
- LVR: 63.26% (high leverage)
- Delta: -0.553 (strong directional bias)
- Theta: -0.0185 (low time decay)
- Gamma: 0.0921 (extreme sensitivity)
- Turnover: $408
- Payoff (5% downside): $5.55 per contract
- This deep put benefits from high gamma and low theta, ideal for aggressive bearish bets.

Aggressive bears should consider PSX20250912P131 into a breakdown below $130.50, while cautious traders may target PSX20250912P130 for a more balanced risk-reward profile.

Backtest Phillips 66 Stock Performance

Act Now: PSX at Pivotal Crossroads—Bullish or Bearish?
Phillips 66’s sharp intraday selloff reflects broader energy sector fragility amid mixed production data and regulatory uncertainty. While the stock’s short-term bullish trend has stalled, technical indicators and options activity suggest a bearish bias. Watch for a breakdown below $124.23 (200D MA) to confirm a shift in momentum. Sector leader Exxon Mobil’s -2.53% decline underscores the sector’s vulnerability. Traders should prioritize PSX20250912P131 for aggressive bearish exposure or PSX20250912P130 for a balanced approach. Key levels to monitor: $130.50 (psychological support) and $125.15 (Bollinger Middle Band).