Insights 
VT 
Oil prices have risen, with ICE Brent trading above $65 per barrel and NYMEX WTI nearing $62 per barrel. This uptick follows a modest OPEC+ production increase for November and heightened geopolitical risks. Ukraine claims it attacked Russia’s Kinef oil refinery, which has a capacity of over 20 million tonnes annually, marking the second attack this month.
Opec Announces Crude Oil Production Boost
OPEC+ plans to boost crude oil production by 137,000 barrels per day in November, mirroring the previous month’s increase. This comes amid forecasts of a supply surplus in the fourth quarter and next year. The IEA predicted a record oil surplus next year due to rising OPEC+ supply.
US oil rig count experienced its first decline in six weeks, with a reduction of two rigs to 422. The overall rig count remains stable at 549 as of early October 2023, though 36 fewer than the same time last year. Speculators sold 11,466 lots of ICE Brent in the last reporting week, reducing their net long positions to 209,113 lots. The data for NYMEX WTI remains unavailable due to the US government shutdown.
With Brent crude pushing past $65, our immediate focus is on supply tightness. The recent decision by OPEC+ to only slightly increase November production by 137,000 barrels per day was less than many anticipated, supporting current prices. Geopolitical tensions, highlighted by the attack on Russia’s Kinef refinery, add a significant risk premium that could drive prices higher in the short term.
We believe this environment warrants positioning for upward price swings, possibly through near-term call options on WTI and Brent. The strike on the Kinef refinery, which can process up to 400,000 barrels a day, is not a minor event and removes significant refining capacity from the market. We saw a similar dynamic in 2022 when geopolitical events caused Brent to spike over $120, reminding us how quickly supply shocks can be priced in.
Market Caution and Speculator Actions
However, we must also consider the growing caution for the fourth quarter and 2026, with both the IEA and OPEC+ forecasting a supply surplus. Speculators are already acting on this, cutting their net long position in Brent for a second week to just over 209,000 lots, a level not seen since August 2025. This, combined with a slight drop in the US oil rig count, suggests the market is wary of a potential price drop beyond the immediate future.
Given these conflicting signals, traders might consider strategies that profit from volatility, rather than a single direction. The uncertainty is amplified by the US government shutdown, which has delayed the CFTC report and left us blind to speculative positioning in WTI crude. This lack of data makes hedging American crude more challenging and could lead to sharp, unexpected price movements once the information is finally released.
