Insights 
VT 
West Texas Intermediate (WTI), the US crude oil benchmark, has edged lower to about $60.00 during the Asian trading hours on Wednesday. This decline follows a notable increase in US crude inventories, as reported by the American Petroleum Institute (API).
The API data indicated a rise in US stockpiles by 6.5 million barrels for the week ending October 31. This contrasts with a previous fall of 4 million barrels, resulting in a year-to-date net gain of 3.6 million barrels in US crude inventories.
Geopolitical Influence On WTI Prices
Meanwhile, geopolitical tensions in regions like the Middle East and Black Sea could influence WTI prices. Strikes on Russian infrastructure, such as the refinery in Nizhny Novgorod, could elevate oil prices if conflicts escalate.
WTI, known for being light and sweet, is a high-quality oil sourced in the US. Its price is impacted by supply-demand dynamics, OPEC decisions and inventory data from API and EIA.
OPEC’s influence is significant in controlling oil prices through production quotas. Lower quotas typically increase prices, while higher production can decrease them. The EIA’s weekly reports are deemed more accurate due to its government affiliation.
We are seeing the market pulled in two directions this week. The significant build in US crude inventories is putting downward pressure on WTI, pushing it near the $60 mark. However, rising geopolitical risks in the Black Sea region are providing a floor under the price for now.
Market Volatility And OPEC+ Meeting
The API’s reported 6.5 million barrel build is a major bearish signal, the largest we’ve seen since July 2025. If today’s EIA report confirms a build of over 5 million barrels, it would be nearly double the five-year average for this time of year. This could easily push prices down towards the mid-$50s as it suggests weakening US demand heading into winter.
On the other hand, we cannot ignore the attacks on Russian refineries, which are intensifying. Recent reports estimate over 500,000 barrels per day of Russian processing capacity has been targeted, a situation reminiscent of the disruptions we saw back in early 2024 that caused brief price spikes. Any successful strike on a major export terminal could quickly reverse the current downtrend.
This conflict between bearish fundamentals and bullish geopolitical risk is causing volatility to rise, with the oil VIX (OVX) now trading above 35. This indicates traders are pricing in larger-than-usual price swings in the coming weeks. For derivative traders, this suggests that short-dated options strategies, like straddles, could be effective to play a significant price move in either direction.
Looking ahead, we must also consider the upcoming OPEC+ meeting scheduled for the first week of December. With prices now threatening to fall below the group’s comfort level, they may signal a willingness to deepen production cuts to defend prices. Historically, even verbal intervention from OPEC+ ministers has been enough to cause a short-term rally in the oil market.
