West Texas Intermediate (WTI) has experienced a five-day increase, reaching its highest value since October, currently trading at approximately $61.50 per barrel. Geopolitical risks from unrest in Iran contribute to this rise, with prices increasing nearly 5% this week.<\/p>\n
Potential supply disruptions are causing concern, as nationwide protests in Iran have reignited fears of US involvement and broader regional instability. Statements from former US President Donald Trump suggest heightened risks of military action, as he urged Iranian protestors to continue their actions.<\/p>\n
Investors are monitoring developments between Iran and the US, while a report from the Energy Information Administration (EIA) showed a surprise 3.391 million-barrel increase in crude inventories. Despite this, the bullish market trend continued, defying expectations for a 2.2 million-barrel draw.<\/p>\n
The EIA’s outlook anticipates global oil prices declining by 2026 due to increased production outpacing demand. The report forecasts Brent crude to average $56 per barrel in 2026 and $54 in 2027.<\/p>\n
WTI Oil, extracted in the United States and traded internationally, has its price driven by supply and demand, geopolitical events, and OPEC decisions. Weekly inventory data from the API and EIA can influence its market price by reflecting supply-demand changes.<\/p>\n
We remember looking back to late 2025, when unrest in Iran created a significant geopolitical risk premium in the oil markets. That tension was the primary driver that pushed WTI crude prices above $61 a barrel. This bullish momentum at the time even overshadowed an unexpected build in crude inventories reported by the EIA.<\/p>\n
That specific risk premium has since eased, but the market has tightened for different reasons. As of mid-January 2026, WTI is trading considerably higher, hovering near $81 a barrel, largely due to disciplined production cuts from OPEC+ that have kept supply in check. The most recent EIA data supports this, showing a larger-than-expected inventory draw of 2.5 million barrels, against forecasts of a much smaller decline.<\/p>\n
Looking back, the EIA’s long-term outlook from 2025, which forecast an average WTI price of around $56 for 2026, seems disconnected from our current reality. That prediction was based on production exceeding demand, but it clearly underestimated the resolve of oil producers to manage supply. This highlights how quickly fundamental forecasts can be invalidated by coordinated producer action.<\/p>\n
For derivative traders, this means implied volatility is likely to remain elevated in the coming weeks. The high price is supported by fragile supply agreements, making the market sensitive to any news of wavering compliance or shifts in global demand. This environment makes options strategies designed to profit from a large price swing, such as long straddles, a logical consideration.<\/p>\n
We are also seeing significant backwardation in the futures curve, where front-month contracts are priced much higher than those for delivery later in the year. This reflects the market’s immediate supply concerns but also suggests a belief that prices may soften in the second half of 2026. This structure creates a positive roll yield for those holding long positions but also signals that the current high prices are not expected to last indefinitely.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI oil rises for five days, nearing $61.50 amid Iran unrest and unexpected inventory increase.<\/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-39176","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\/39176","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=39176"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39176\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=39176"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=39176"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=39176"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}