WTI Crude Oil has fallen below $60 per barrel, reaching a one-week low amid a three-day decline. This drop follows an unexpected inventory build reported by the US Energy Information Administration (EIA), with crude stocks rising by 5.202 million barrels, surpassing the anticipated increase of 1.8 million barrels.

US crude production remains near record levels at 13.65 million barrels per day, while net crude imports have increased to 1.56 million bpd. Despite OPEC+ agreeing to a modest output increase of 137,000 barrels per day for December, plans to pause further hikes aim to prevent an oversupply.

Global Manufacturing Data

Global manufacturing data continues to signal weak demand, with the Eurozone’s PMI for October at 50 and US ISM Manufacturing PMI at 48.7. In China, the official NBS Manufacturing PMI is at 49, indicating ongoing challenges in the sector.

The rising US Dollar, coupled with uneven manufacturing data and increasing oil inventories, has placed pressure on WTI Crude Oil. WTI is a benchmark oil traded globally, influenced by supply-demand dynamics and decisions by OPEC and OPEC+.

Weekly oil inventory reports by API and EIA influence WTI prices, as changes reflect supply-demand fluctuations. OPEC’s production decisions can also impact prices, with lower quotas often increasing them.

Market Positioning

With WTI crude oil breaking the key $60 per barrel level, we should position for continued downward pressure. This recent drop is driven by a surprise 5.2 million barrel inventory build, confirming that supply is outstripping weak demand. The market sentiment has clearly shifted bearish, making short-term rallies potential opportunities to establish short positions.

The demand outlook appears fragile, which supports a bearish stance. Weak manufacturing PMIs from China and the United States are not new; we have seen the J.P. Morgan Global Manufacturing PMI hover near or below the 50-point expansion mark for much of 2025. This persistent weakness suggests that a significant rebound in oil consumption is unlikely in the near term, especially as we head into the winter months.

On the supply side, U.S. crude output holding near a record 13.65 million barrels per day is a major headwind for prices. This continues the trend we saw develop through 2024, where American producers proved highly resilient to price fluctuations. OPEC+’s decision to pause production hikes rather than enact deeper cuts signals they are hesitant to sacrifice more market share to support prices above current levels.

For derivative traders, this environment favors strategies that profit from falling prices or high volatility. Buying put options could be a direct way to bet on further declines, potentially targeting support levels in the low-$50s that we haven’t seen since mid-2024. Alternatively, selling call options with strike prices well above $65 could be a way to collect premium, capitalizing on the view that a major price recovery is improbable in the coming weeks.

We must remain aware of geopolitical risks, which can abruptly shift market dynamics. Any unexpected escalation in the Middle East or disruptions to key shipping lanes could quickly override the current supply and demand fundamentals. Looking back at the volatility spikes in 2022 and 2024, it is clear that such events can cause sharp, unpredictable rallies that would challenge any bearish position.

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