WTI is trading around $62.65 during the Asian session on Wednesday due to concerns over production losses from a US winter storm. The storm has reportedly disrupted about 2 million barrels per day, representing around 15% of national output.
Crude exports from US Gulf Coast ports also halted on Sunday, compounding supply concerns. Additionally, geopolitical tensions in the Middle East could influence WTI prices.
EIA Report’s Potential Impact
The EIA crude oil stockpiles report, anticipated later in the day, might impact prices depending on the inventory levels disclosed. A draw in stockpiles would signal strong demand, potentially boosting prices, while a stockpile build might indicate weak demand, possibly lowering prices.
WTI Oil, known for its high quality, is a type of crude oil primarily sourced in the United States. Its prices are influenced by supply and demand dynamics, geopolitical factors, and the value of the US dollar.
Weekly oil inventory reports from the API and the EIA are closely watched, with the latter seen as more reliable. OPEC’s decisions on production quotas can also significantly impact WTI prices, affecting global supply levels.
Weather Related Volatility
West Texas Intermediate is finding support near $62.65 as we assess the impact of the recent US winter storm. The severe cold has disrupted production, with recent estimates from last week suggesting over 700,000 barrels per day were shut-in across Texas and North Dakota. This supply shock creates an immediate upside risk for prices, making short-term call options an attractive strategy.
We will be closely watching the EIA stockpiles report due out later today for confirmation of this tightening supply. A larger-than-expected draw in crude inventories would validate the bullish sentiment and could propel WTI toward higher resistance levels. This report is the most important data point for this week and will dictate short-term price action.
Given that weather disruptions are temporary, we anticipate a period of increased volatility in the coming weeks. Traders might consider using options to trade this choppiness as the market weighs the short-term supply loss against the broader economic picture. This environment favors tactical positions over long-term directional bets.
Beyond the storm, rising geopolitical tensions continue to support the market. Ongoing shipping risks in the Red Sea, which saw vessel traffic through the Suez Canal drop by over 40% in late 2025 compared to the prior year, provide a solid floor for prices. These factors limit the potential downside even after US production fully recovers from the freeze.
However, we must also consider the demand side of the equation. Recent manufacturing data from China came in slightly below expectations, and the latest US inflation report showed core inflation remains sticky at 2.9%. These headwinds could cap any significant rally, as they suggest global demand may not be strong enough to sustain much higher prices.
As we saw with similar weather events in past years, these price spikes can reverse once production normalizes. However, with OPEC+ having reaffirmed its commitment to production cuts through the first quarter of 2026, the overall supply backdrop remains tight. This discipline from the producer group magnifies the impact of any unexpected outages like this one.
