Insights 
VT 
West Texas Intermediate (WTI) Oil rises to nearly $60.00 following a Ukrainian drone strike that damages an oil depot at Russia’s Black Sea port of Novorossiysk. The WTI price climbs over 2%, reaching around $59.90 during Asian trading hours. Lukoil PJSC begins reducing staff days before new US sanctions set for November 21. These factors could lead to about a third of Russia’s seaborne oil exports stranded due to rerouting delays.
Despite this rise, oil prices might face challenges amid a potential supply glut flagged by the International Energy Agency (IEA). The IEA projects production exceeding demand by 2.4 million barrels this year and 4 million next year. OPEC and OPEC+ members, including Russia, have increased production since April. Additional supply from the US and Brazil contributes to oversupply concerns, with OPEC’s report suggesting a modest surplus of approximately 20,000 bpd next year.
Wti As A Market Benchmark
WTI Oil, a benchmark in the market, is a major type of crude oil recognised for its light and sweet characteristics. Oil price drivers include supply-demand dynamics, global growth, political situations, and OPEC’s production decisions. Inventory reports, like those from the API and EIA, also affect WTI prices. When OPEC alters production quotas, WTI prices can be impacted by the changes in supply.
The attack on Russia’s Novorossiysk port has pushed WTI crude near $60, signaling a clear opportunity for short-term bullish strategies. We see this as a direct echo of the supply disruptions from early 2024, where similar incidents caused temporary price spikes of 5-7% in the following weeks. This event provides a near-term catalyst for upward price movement before fundamentals take over again.
With new US sanctions hitting Russian oil on November 21, the supply pressure is set to increase significantly. The fact that major buyers like India and China are already halting purchases could strand a large volume of crude, creating a real, not just perceived, supply crunch. This makes call options with late November and early December expirations particularly attractive as traders price in these escalating risks.
Immediate Tension Versus Long Term Pressure
However, we must not ignore the significant bearish pressure on the horizon. The International Energy Agency is forecasting a massive supply glut of 4 million barrels per day for 2026. Data from earlier this month confirms this trend, with the US Energy Information Administration reporting that American crude production just hit a new record of 13.5 million barrels per day.
This conflict between immediate geopolitical tension and long-term oversupply suggests a period of high volatility. OPEC+ has been increasing production since April 2025, which undermines the cartel’s historical role in supporting prices. This dynamic, where short-term supply shocks meet long-term surplus, has caused implied volatility in oil options to jump 15% this week, making strategies like straddles a viable way to trade the expected price swings without betting on a specific direction.
