Insights 
VT 
West Texas Intermediate (WTI) crude oil price fell to about $61.20 during early Asian trading on Friday. The easing geopolitical tensions in the Middle East, particularly the ceasefire between Israel and Hamas in Gaza, have contributed to this decrease.
The agreement requires a cessation of hostilities, Israel’s partial withdrawal, and the release of hostages by Hamas. Cooling tensions in a region that supplies a third of the world’s crude oil put downward pressure on WTI prices.
Us Government Shutdown
The prolonged US government shutdown, now in its tenth day, affects economic growth and oil demand. President Trump’s plans to use the shutdown to cut programmes could prolong this situation.
Conversely, uncertainty over the Russia-Ukraine conflict might support oil prices. Online trading reflects concerns about further sanctions on Russian exports, potentially reducing global oil supply.
West Texas Intermediate is a high-quality type of crude oil, known for its low sulfur content. Its price is influenced above all by global supply and demand, political events, and decisions by OPEC. Inventory data from the American Petroleum Institute and the Energy Information Agency also impacts WTI prices, as does the value of the US dollar. OPEC’s decisions on production quotas play a key role in driving oil prices globally.
The current market presents a stark contrast to the past environment where Middle East peace developments pushed WTI prices below $61.50. As of today, October 10, 2025, crude is trading around $88 a barrel, driven by renewed geopolitical risk. We are seeing increased tensions in the Strait of Hormuz, which is keeping a significant risk premium baked into the price.
Market Volatility
This elevated geopolitical uncertainty is increasing volatility in the oil markets. Implied volatility on front-month options has climbed to over 40%, a level we haven’t seen since the supply shocks of early 2024. This suggests traders should consider buying call options or bull call spreads to gain upside exposure while defining their maximum risk.
On the demand side, the picture is less clear, creating a push-and-pull on prices. The latest US jobs report for September 2025 showed a slowdown in hiring, and recent global manufacturing PMI data points toward sluggish economic growth. A prolonged period of high interest rates appears to be finally weighing on global demand for energy.
However, recent supply-side data is providing strong support for prices. The Energy Information Administration (EIA) reported a surprise crude inventory drawdown of 4.2 million barrels this past Wednesday, far exceeding analyst expectations of a small build. This, combined with OPEC+ maintaining its current production cuts through the end of the year, signals a tight physical market.
Given these conflicting signals—bullish supply dynamics against a bearish demand outlook—we believe traders should prepare for sharp price swings. A strategy like a long strangle, which involves buying an out-of-the-money call and put, could be effective. This allows a trader to profit from a significant move in either direction over the coming weeks.
