Insights 
VT 
WTI US Oil stabilises at $58.30, rebounding from a five-month low, despite bearish US inventory data showing a 7.36M barrel increase in Crude Oil stocks. A decline in distillate inventories helps to offset the rise in crude stocks.
Market sentiment gets a slight lift as the US pressures India to stop importing Russian Oil. President Trump announces that India’s Prime Minister Modi pledges to cease buying Russian Oil. Japan is also expected to halt Russian energy imports, suggesting tighter global supply.
New Uk Sanctions
New UK sanctions target Russia’s Lukoil and Rosneft, its top Oil companies, adding to the pressures against Moscow. The ongoing US government shutdown affects market sentiment, with a Treasury official citing a $15 billion weekly economic impact, affecting demand expectations.
Oil prices await EIA Crude Oil Stocks Change data, expected to show a modest increase for further supply dynamics. Geopolitical risks and supply uncertainties balance the bearish data, keeping WTI stable.
WTI Oil is a benchmark in the Oil market, influenced by factors such as global growth, political instability, and OPEC decisions. Inventory data from API and EIA impacts prices, with a drop indicating increased demand. The value of the US Dollar also plays a role in Oil pricing.
We are seeing WTI crude oil hold near $58.30, a price that feels historically low when we recall the highs well over $100 per barrel seen after the start of the conflict in Ukraine in 2022. The market is currently caught between very bearish US inventory data and significant geopolitical supply threats. This sets up a classic conflict that derivative traders can use to their advantage.
Ongoing Us Government Shutdown
On the bearish side, the ongoing US government shutdown is a serious drag on demand forecasts. With an estimated economic cost of $15 billion per week, it is no surprise that the International Energy Agency (IEA) recently trimmed its global demand growth forecast for the fourth quarter. The large 7.36 million barrel build in crude stocks reported by the API seems to confirm this weakening consumption picture for now.
However, the supply side of the equation is tightening and presents a more compelling bullish case. We know that since 2022, India became a top buyer of Russian seaborne crude, recently importing over 1.5 million barrels per day. If Washington’s pressure effectively removes this demand, it would create a major disruption and force a rerouting of global oil flows.
This geopolitical risk is likely why the price has stabilized instead of falling further on the inventory news. We must also consider that a WTI price below $60 is likely uncomfortable for OPEC+, which is already withholding over 3 million barrels per day of supply from the market to maintain price stability. The cartel may signal further cuts if prices show sustained weakness.
Given this standoff, we expect volatility to increase in the coming weeks, a view supported by the oil volatility index (OVX) climbing to a three-month high. This environment is ideal for options strategies like straddles or strangles, which can profit from a large price move in either direction. Traders looking for direction could use options to define their risk, buying calls to bet on the supply threats or puts to trade a potential break lower on weak demand.
The immediate focus must be on the official EIA inventory data due later today. A confirmation of the large crude build could push prices down to test the recent low of $57.33, while a smaller build or a surprise draw would likely cause a sharp rally. We should be prepared for whichever direction the market breaks.
