Insights 
VT 
WTI has risen for four consecutive days despite an unexpected rise in US crude inventories. US Energy Information Administration data revealed inventories grew by 3.72 million barrels, surpassing predictions of a 2.25 million-barrel increase. However, a modest OPEC+ production increase of 137,000 barrels per day has calmed fears of oversupply, supporting prices.
At this time, West Texas Intermediate trades around $62.25 per barrel, a 0.80% daily gain. This comes after recovering from a previous low of near $60.00. Despite current positivity, long-term challenges remain due to an increased US production forecast of 13.53 million barrels per day by 2025, indicating future supply abundance.
Geopolitical Factors And Technical Analysis
Geopolitical factors also weigh on the market with potential disruptions from the Middle East and uncertainties relating to sanctions on Russian and Iranian oil. Technically, WTI shows vulnerability, trading below its key moving averages with immediate support at $61.50. Resistance lies near the 21-day Simple Moving Average of $62.78.
In the broader context, WTI, a high-quality American oil, is a benchmark in global oil trading. Its price is influenced by supply-demand dynamics, OPEC decisions, geopolitical events, and fluctuations in the US Dollar, with inventory reports by the API and EIA influencing price direction.
The current market presents a classic conflict for us, with a tight OPEC+ supply decision pushing prices up against a bearish build in US inventories. We have seen US crude output already average above 13.4 million barrels per day in the third quarter of 2025, which makes the EIA’s forecast for a record year feel very immediate. This fundamental tug-of-war suggests that prices may struggle for clear direction in the short term.
Strategies For Risk Management And Profit
Given the persistent geopolitical risks in the Middle East, positioning for a potential upside surprise is a logical move. We remember the price spikes related to regional tensions back in early 2024, which show how quickly the landscape can change. Purchasing some out-of-the-money call options, perhaps with a $65 strike for a December 2025 expiry, offers a limited-risk way to capitalize on any sudden supply disruption.
However, the structural headwind of record US production cannot be ignored, especially with the recent trimming of 2026 global growth forecasts by the IMF. This combination points to a potential oversupply scenario if demand falters. To hedge against this, holding put options with a strike price below the key $60 level could prove to be a valuable defensive strategy.
For the coming weeks, the technical picture supports a range-bound market, with the price currently pinned below its 21-day and 50-day moving averages. This suggests that selling volatility could be a profitable strategy, for instance by using option spreads that benefit from the price staying between roughly $60 and $64. This approach allows us to profit from market indecision as these competing narratives play out.
