West Texas Intermediate (WTI), the US crude oil benchmark, is trading near $60.70 during Wednesday’s Asian session. This decline occurs amid Venezuela resuming oil exports and a reported increase in US crude inventories, as disclosed by the American Petroleum Institute (API).<\/p>\n
According to Reuters, Venezuela is reversing oil production cuts from a previous US embargo, with two supertankers recently departing, each carrying approximately 1.8 million barrels of crude oil. This could be part of a 50-million-barrel supply agreement between Caracas and Washington aimed at restarting exports.<\/p>\n
US crude stockpiles have experienced a notable build, with API’s weekly report showing an increase of 5.27 million barrels for the week ending January 9. This is contrasted with a 2.8 million-barrel fall the previous week, whereas market consensus expected a decline of 2.0 million barrels.<\/p>\n
Additionally, tensions in Iran, a key oil producer, may influence WTI prices, as President Trump withdraws from meetings with Iranian officials and promises support to protesters. Iran’s security forces have reportedly been aggressive against protests, with several casualties reported.<\/p>\n
With WTI crude oil trading near $60.70, we are seeing significant downward pressure build. The surprise 5.27 million barrel increase in US stockpiles reported by the API is a major bearish signal, especially as the market was expecting a draw. All eyes are now on the official EIA report later today, which is widely expected to confirm this trend of rising inventories.<\/p>\n
This supply glut is being worsened by new barrels hitting the market from two directions. Domestically, US crude production is running at record highs, with the latest EIA forecasts from last week showing output is expected to average over 13.5 million barrels per day this quarter. Compounding this, the resumption of Venezuelan exports introduces a wild card that the market had not priced in until this week.<\/p>\n
On the demand side, there are growing concerns about the strength of the global economy, which directly impacts oil consumption. Recent manufacturing PMI data out of China for December 2025 showed a slight contraction, raising flags about demand from the world’s largest oil importer. This weak demand outlook, combined with surging supply, creates a strong case for lower prices in the near term.<\/p>\n
For derivative traders, this environment suggests that bearish positions may be favorable over the coming weeks. We’ve seen a notable increase in open interest for put options with strike prices at $58 and $55 for the February and March contracts. Strategies like buying puts or establishing bear put spreads could offer a way to capitalize on potential further declines toward the mid-$50s.<\/p>\n
However, we must remain vigilant about the ongoing geopolitical tensions in Iran. Any escalation or direct US intervention could trigger a sudden supply shock, causing prices to spike sharply and squeezing short positions. Therefore, holding some cheap, out-of-the-money call options could serve as a cost-effective hedge against this unpredictable risk.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI dips near $60.70 as Venezuela resumes exports, US crude inventories rise, and Iran tensions grow.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39090","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=39090"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39090\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=39090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=39090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=39090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}