Insights 
VT 
WTI US Oil increased by 0.24% on Thursday, trading around $60.40. Oil prices have been consolidating around this level since Tuesday.
A truce was reached between the US and China during the APEC Summit in South Korea. The US agreed to cut tariffs on select Chinese imports from 57% to 47%, and China agreed to resume purchases of US soybeans and reduce rare-earth export restrictions.
Tensions In Europe
US sanctions on Russian producer Rosneft have caused tensions in Europe, with Germany considering nationalizing its local subsidiary. The US Treasury granted a temporary exemption until April 2026 for this situation.
The Federal Reserve cut its benchmark interest rate by 25 basis points to a range of 3.75%-4.00% on Wednesday, ending Quantitative Tightening on December 1. Despite this, Fed Chair Jerome Powell indicated further rate cuts in December were uncertain, strengthening the USD and limiting Crude Oil’s rise.
OPEC+ may modestly increase output in December to regain market share. This, along with a strong USD, keeps market participants cautious, maintaining Oil prices close to $60.
WTI finds support around $59.50, with resistance at $60.40. A break above this could lead to $61.00, with further potential gains towards $62.00. Conversely, a drop below $59.50 might expose WTI to more pressure, with key support at $55.97.
Market Strategies Amidst Volatility
With WTI crude oil hovering around the $60 mark, we are seeing a classic standoff between competing market forces. The one-year trade truce between the US and China has removed some immediate economic risk, but the Federal Reserve’s surprisingly hawkish tone is strengthening the US dollar. This creates a challenging environment where bullish sentiment is capped, suggesting options strategies that profit from a range-bound market could be effective in the near term.
The US-China agreement to lower some tariffs is a positive step, but we must remember how fragile these truces have been, similar to what we observed back in the 2019-2020 period. The remaining 47% tariff is still historically high, indicating that underlying tensions could easily resurface and disrupt demand expectations. For now, this reduced risk of immediate escalation may dampen volatility and make selling premium on out-of-the-money options appealing.
On the other hand, the Federal Reserve’s message is a significant headwind for oil prices. While they cut rates, Chairman Powell’s comments suggest a pause, which has propelled the dollar higher and makes oil more expensive for foreign buyers. This aligns with recent October 2025 data from the EIA, which projects a slight slowdown in global oil demand growth for 2026, giving weight to the Fed’s cautious stance.
The supply side presents its own conflicting signals, keeping prices anchored. OPEC+ is signaling a willingness to increase output in December to protect its market share, which acts as a ceiling on any price rally. Meanwhile, the US sanctions on Rosneft create a long-term supply risk for Europe, but the exemption until April 2026 means there is no immediate crisis to drive prices higher.
Given this backdrop, we see an opportunity in strategies that capitalize on sideways movement and elevated volatility. The CBOE Crude Oil Volatility Index (OVX) remains above 35, reflecting the market’s uncertainty, which makes selling options premium attractive. Setting up iron condors with short strikes around the key technical levels of $59.50 and $61.00 could capture this premium as the market digests these developments.
Looking ahead into November and December, traders should also consider hedging against a potential breakdown of this balance. A break below the critical $59.37 support level could trigger a rapid move down toward the October low near $55.97. Buying cheap, longer-dated puts below this level could serve as effective portfolio insurance should the US-China truce falter or economic data worsen.
