Insights 
VT 
West Texas Intermediate (WTI) Oil rebounded around 2.5%, trading near $59.40, after previously losing over 5.0%. The recovery followed US President Trump’s comments, reassuring that China’s economy “will be fine” and expressing a desire to “help China, not hurt it” amid ongoing trade tensions.
Trump also mentioned the Gaza conflict’s end, which eased supply concerns. On Sunday, he stated there was no necessity for a meeting with China’s President Xi Jinping, even as threats of 100% tariffs loomed. Meanwhile, China indicated potential retaliatory actions against these tariff threats.
China’s Crude Oil Import Surge
In September, China’s crude Oil imports increased by 3.9%, reaching 47.25 million metric tons, or about 11.5 million barrels per day. This surge was due to refineries operating at peak utilization rates.
WTI Oil, sourced in the US, is known for its low gravity and sulfur content, making it high-quality and easily refined. It is distributed via the Cushing hub and used as a benchmark in the Oil market.
Factors influencing WTI Oil prices include supply and demand dynamics, global growth, political instability, and currency value. OPEC’s production decisions can also significantly affect prices, as can inventory data from API and EIA.
Volatility and Geopolitical Landscape
We are seeing oil prices attempt to stabilize around the $59.50 mark after significant volatility. The market is caught between reassuring comments from President Trump regarding China and the easing of supply fears from the Middle East. This push-and-pull creates a tricky environment where headline risk is extremely high.
The geopolitical landscape remains a primary source of uncertainty for traders in the coming weeks. While Trump’s declaration on the Gaza conflict has removed a significant risk premium, we’ve seen reports of minor ceasefire violations which suggest tensions could easily reignite. Furthermore, all eyes are on the upcoming G20 summit next month, with the market pricing in low odds of a substantive meeting between Trump and President Xi, keeping trade-related volatility on the table.
Demand signals are providing a conflicting picture that warrants caution. While Chinese crude import data for September 2025 was strong, more recent figures, such as the Caixin Manufacturing PMI released on October 1st, showed a slight contraction to 49.8, missing expectations. This contrasts with a robust U.S. non-farm payrolls report from early October, suggesting American demand may be holding up better than Asian demand.
From a supply perspective, the latest Energy Information Administration (EIA) report from last Wednesday, October 8, 2025, showed a surprise inventory build of 2.1 million barrels, which is currently weighing on prices. Traders should be prepared for this week’s API and EIA reports, as another build could signal weakening U.S. demand and push WTI back toward the mid-$50s. Historically, two consecutive large builds in October have often preceded a period of price weakness heading into November.
The actions of OPEC+ will likely provide a floor for any significant price declines. Recent statements from key members have reaffirmed their commitment to maintaining current production quotas through the end of the year to ensure market stability. This suggests that while upside may be capped by demand worries, OPEC+ is unlikely to let prices fall into a downward spiral.
Given these opposing forces, we expect WTI to remain in a choppy, range-bound pattern for the next few weeks, likely between $57 and $62. Derivative traders could consider strategies that profit from this volatility and lack of clear direction, such as selling strangles or straddles with near-term expiries. For those looking for directional plays, using options to define risk will be critical until a clearer trend emerges from either the U.S.-China trade front or upcoming inventory data.
