Insights 
VT 
Impact of Rate Cuts on Oil Prices
West Texas Intermediate (WTI) Oil maintains its gains, trading around $61.50 per barrel, as OPEC+ announces a production increase of 137,000 barrels per day for November. This increment is lower than anticipated, alleviating concerns about oversupply in the market.
The decision matches October’s production rise, despite earlier speculations of a larger increase led by Saudi Arabia. OPEC+ emphasises that its decision aligns with a stable global economic outlook and could be altered if circumstances change.
In addition to supply concerns, WTI Oil prices benefit from the potential rate cuts by the US Federal Reserve, as lower borrowing costs might stimulate economic activity and demand for oil in the United States. The CME FedWatch Tool indicates a 95% probability of an October rate cut and an 84% chance of a further reduction in December.
WTI Oil, a type of crude primarily sourced in the United States, is a market benchmark. Its price is driven by supply and demand factors, geopolitical events, and OPEC decisions, among others. Regular inventory reports by the American Petroleum Institute and the Energy Information Agency also impact prices, showcasing how fluctuations in inventory levels alter market dynamics.
The recent decision by OPEC+ to limit its November production increase to only 137,000 barrels per day is a bullish signal for WTI crude. This smaller-than-expected hike eases supply concerns and should help establish a solid floor for prices around the $60-$61 level. We’ve seen reports from September 2025 showing that OPEC+ compliance with existing quotas was around 98%, suggesting the group remains disciplined in managing supply.
Investment Strategies for Traders
Adding to this upward pressure is the increasing likelihood of interest rate cuts from the U.S. Federal Reserve. The market is now pricing in a 95% chance of a cut this month, which is supported by the latest CPI data for September 2025 coming in at a cooler-than-expected 2.8% year-over-year. Lower rates typically stimulate economic activity and, by extension, oil demand.
We saw a similar pattern back in late 2023 when the Fed first signaled a pivot away from its aggressive hiking cycle. WTI prices rallied over 10% in the following months as markets priced in a softer economic landing and increased demand. The current environment feels like a repeat of that setup, providing a historical precedent for a potential move higher.
Traders should monitor weekly inventory reports closely for confirmation of this tightening market. The most recent EIA report from last week showed a surprise draw of 2.1 million barrels, against expectations of a small build, which helped support the current price. Another significant draw this week would likely push prices toward the next resistance level.
Given these factors, bullish derivative strategies appear favorable in the coming weeks. We believe buying call options or selling out-of-the-money put credit spreads on November and December contracts could be an effective way to gain exposure to potential price appreciation. Consider call options with strike prices around $65 as a way to capitalize on a continued move higher driven by tight supply and supportive monetary policy.
