In December, the weekly crude oil stock in the United States dropped by 9.3 million barrels. This is a significant decrease from the previous drop of 4.8 million barrels. Other market activities showed mixed currency movements. The EUR/USD stabilized around 1.1750, while the GBP/USD gained some ground above 1.3400, fueled by positive UK preliminary data. On the other hand, the USD/JPY fell below 155.00 amid speculation of interest rate hikes by the Bank of Japan.

Gold and Cryptocurrency Markets

Gold prices saw slight increases due to cautious market sentiment. However, it is still trading within a range, largely because of hopes for peace between Russia and Ukraine. Similarly, XRP is holding steady above $1.90 despite the bearish trends in the cryptocurrency market. BNB’s price fell below $855 due to negative market sentiment and increased retail activity, as shown in its on-chain and derivatives data. FXStreet provides insights into market trends but warns about potential risks. The markets and instruments discussed are for informational purposes only and are not recommendations to buy or sell assets. Investors should conduct thorough research before making financial decisions.

Crude Oil Market Dynamics

The notable decrease of 9.3 million barrels in crude oil inventory for the week of December 12 is a strong positive sign. This decline is nearly double the previous week’s figure and suggests unexpectedly high demand as we near the end of the year. Traders should prepare for a possible rise in oil prices. The EIA’s official data released on Wednesday confirmed this trend, showing a significant drawdown of 8.5 million barrels that pushed West Texas Intermediate futures above $95 per barrel for the first time since September. Historically, large inventory draws in December, a time typically associated with builds, have led to strong price increases in the first quarter of the following year. This indicates a likely upward trend. Compounding supply concerns, a total blockade on sanctioned Venezuelan oil tankers will further tighten an already limited market. This increases immediate global supply constraints, minimizing the potential downside for crude oil in the upcoming weeks. We are currently in a market experiencing both a demand surprise and a new supply shock. For derivative traders, this situation favors bullish strategies, such as buying call options on WTI or Brent futures for February and March 2026 contracts. With the oil volatility index (OVX) climbing back towards 40, options prices are rising, reflecting the potential for significant price fluctuations. Selling cash-secured puts may also be an effective strategy to collect premiums while establishing a lower entry point. However, we are monitoring the ongoing Russia-Ukraine peace talks, as any progress could dampen market excitement and lead to a pullback. Additionally, OPEC+ decided last week to keep its current production quotas into the new year, citing worries about a possible global economic slowdown. This indicates that, although supply is tight now, it remains an important factor to watch. Create your live VT Markets account and start trading now.

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