West Texas Intermediate (WTI) Oil prices have gone up during the early European session. WTI is now priced at $59.21 per barrel, rising from Wednesday’s closing price of $58.93. Brent crude also saw an increase, moving from $62.68 to $62.93. WTI Oil, known for being “light” and “sweet,” comes from the US and is often used as a market standard.

Factors Influencing Oil Prices

WTI Oil prices are influenced by supply and demand. Global economic growth can boost demand, while political unrest, conflicts, and decisions made by OPEC impact supply. The value of the US Dollar is important too, since oil is mostly traded in dollars. Weekly inventory reports from the API and EIA show changes in supply and demand, which affect prices. When inventories drop, it typically means demand is rising, leading to higher prices. In contrast, if inventories increase, it suggests a surplus of supply, which can lower prices. OPEC’s production quotas, set during their biannual meetings, can influence WTI prices by adjusting supply levels globally. OPEC+, which includes countries like Russia, also affects these supply decisions. With WTI oil currently above $59, we can expect this upward trend to continue in the short term. The start of winter in the Northern Hemisphere usually increases demand for heating oil, a refined product from crude. Traders might consider buying short-term call options to take advantage of this seasonal demand.

Future Market Considerations

This price increase is supported by disciplined supply management. After their November 2025 meeting, OPEC+ committed to maintaining current production cuts into the first quarter of 2026, establishing a strong price floor. This suggests that the cartel is determined to avoid a significant price drop, much like their actions in 2023. Recent reports from the Energy Information Administration (EIA) also point to positive trends. This week’s report revealed a significant drop in crude inventories of 4.1 million barrels, far exceeding the expected 1.2 million barrel decrease. This indicates that demand in the US is currently outpacing supply, which should sustain WTI prices in the upcoming weeks. However, we also need to consider the risk of a global economic slowdown. Recent figures showed that China’s manufacturing PMI for November fell to 49.7, marking the second month of contraction, which could reduce future oil demand. This scenario makes long-term put options an attractive choice for hedging against positions that expect higher prices. Looking back at the volatility seen in the early 2020s, it’s clear that geopolitical events can lead to sudden price spikes. Recent drone attacks on shipping lanes in the Middle East have already added a risk premium to the market. Therefore, strategies that benefit from increased volatility, like long straddles, could be wise for traders uncertain about market direction yet expecting significant price shifts. Create your live VT Markets account and start trading now.

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