Insights 
VT 
WTI Crude Oil traded around $61.70, a 0.65% increase on the day, maintaining consolidation below $62.50 since October’s start. The market responded to record Oil exports from Iraq, with over 102 million barrels in September, leading to concerns of potential oversupply in OPEC+.
US sanctions on Russian Oil companies Lukoil and Rosneft could reduce Russian supply, offsetting increased Iraqi output. These US actions are the most forceful against Russia since the Ukraine invasion. Optimism in US-China trade discussions is supporting Crude Oil prices, as both nations aim to finalise an agreement avoiding new tariffs.
Recent Talks In Trade
Recent ASEAN summit talks were deemed fruitful, with US indicating the withdrawal of 100% tariffs on Chinese imports. Beijing delaying rare earth export restrictions suggests easing trade tensions. WTI price support is influenced by geopolitical risks, high Iraqi production, and a potential trade truce.
WTI Oil is a high-quality, light, and sweet Crude sold internationally. Key price drivers include supply-demand dynamics, global growth, political instability, and OPEC decisions. Inventory data, such as API and EIA reports, impact pricing by indicating supply-demand shifts. OPEC’s production quotas significantly influence WTI prices, with OPEC+ including Russia as a major player.
With WTI crude consolidating below the $62.50 resistance level, the market is signaling a period of indecision. The push from record Iraqi exports is being met by the pull of ongoing sanctions against key Russian producers. This tug-of-war between competing supply narratives suggests a tight range for now.
We should be cautious about the high Iraqi output, but remember the broader context of OPEC+ policy. The group agreed back in June 2024 to extend its deep production cuts of 2.2 million barrels per day well into 2025. This collective action is designed to place a floor under prices, making a sustained collapse below $60 less likely unless compliance falters significantly.
Market Dynamics and Strategy
The sanctions on Russian firms are no longer a new development, but a persistent market factor. While Russian seaborne exports have remained surprisingly resilient, averaging around 3.4 million barrels per day through much of 2024, logistical and financial hurdles continue to add a risk premium to the price. Any further tightening from Washington could quickly remove barrels from the market and break the current stalemate.
On the demand side, the optimism from the old US-China trade talks of the Trump era feels like a distant memory. Today, we are more concerned with the International Monetary Fund’s recent downward revision of global growth for 2025, which caps the upside for oil demand. The market is supported, but it lacks a strong demand-side story to push prices significantly higher.
For derivative traders, this tight consolidation below $62.50 points to low implied volatility, making it tempting to sell options. Strategies like short strangles could yield profits if the price remains range-bound in the coming weeks. However, such a strategy carries significant risk if a breakout occurs.
We must watch inventory data closely as a potential catalyst for that breakout. The recent surprise build of 3.2 million barrels reported by the Energy Information Administration (EIA) shows how quickly sentiment can be tested. Another significant build could give bears the ammunition to push prices decisively below $61.
Given the potential for a sharp move once this consolidation breaks, buying long-dated options might be a more prudent approach. Purchasing December 2025 or January 2026 puts or calls allows us to position for a breakout while defining our risk. We only have to look back at the immense volatility following 2022 to understand how quickly a calm market can turn violent.
