Insights 
VT 
Technicals And Price Levels
We are seeing WTI crude prices attempting to stabilize, but the market dynamics have shifted significantly since the days when prices hovered near $60 per barrel. As of late October 2025, WTI has been trading in a volatile range around $85, driven by conflicting supply and demand signals. This contrasts sharply with past concerns over minor OPEC+ output hikes, as the group just signaled a potential 500,000 bpd cut to shore up prices heading into 2026.
The fundamental issue of oversupply from non-OPEC members continues to weigh on the market, just as it did years ago. The Energy Information Administration’s latest report from October 2025 shows U.S. crude output has hit a new record of 14.1 million barrels per day, surpassing previous highs. This immense production capacity creates a ceiling for any price rallies and remains a key factor for traders betting on downside potential.
Demand Side Concerns
On the demand side, concerns have shifted from old trade truce announcements to fresh signs of economic weakness. The latest Caixin Manufacturing PMI data out of China registered at 49.8, indicating a slight contraction and fueling fears of slowing energy consumption in the world’s largest oil importer. This demand uncertainty is a much more immediate threat to prices than the old geopolitical headlines we saw during the Trump administration.
For derivative traders, this environment of a hawkish OPEC+ facing weak demand and high U.S. supply suggests elevated volatility in the coming weeks. The CBOE Crude Oil Volatility Index (OVX) is sitting at 38, reflecting this market tension and making long option strategies like straddles or strangles attractive. These positions can profit from a large price move in either direction without needing to correctly predict the outcome of the supply-demand battle.
Another approach would be to use calendar spreads to exploit the difference between short-term uncertainty and a clearer long-term outlook. We could sell front-month call options to capture premium decay from the expected choppy, range-bound trading. Simultaneously, we can buy longer-dated calls to maintain bullish exposure in case OPEC+ production cuts eventually tighten the market significantly next year.
