WTI prices jumped to almost $55.75 during the Asian trading session on Wednesday, showing a 1.25% increase. This rise followed US President Trump’s order blocking all sanctioned oil tankers from entering or leaving Venezuela, which changed market dynamics. Additionally, the American Petroleum Institute reported a drop of 9.3 million barrels in US crude oil stockpiles last week.

Market Volatility and Geopolitical Tensions

West Texas Intermediate (WTI), a key US crude oil benchmark, is facing volatility due to concerns about crude supplies from Latin America. The market is eagerly waiting for the Energy Information Administration’s (EIA) report on crude oil stockpiles for more information. Trump’s blockade raises the risks of supply disruptions, which could help WTI prices climb higher amid geopolitical tensions. The American Petroleum Institute noted a bigger-than-expected decrease in US crude oil inventories of 9.3 million barrels, compared to the anticipated 2.2 million barrel drop. Meanwhile, discussions between the US and Ukraine about a potential peace deal with Russia could also influence WTI price outlooks. WTI oil, known for its high quality, is affected by various factors including global economic growth, political instability, and OPEC’s oil production decisions. Oil prices frequently respond to inventory figures from API and EIA, reflecting supply and demand. OPEC’s choices significantly shape the oil market. As of December 17th, 2025, WTI crude is showing strong momentum, rising above $82 a barrel this week. This increase is driven by renewed geopolitical tensions in Latin America and a surprising drop in US stockpiles. We are closely monitoring the upcoming EIA report for confirmation of this upward trend.

Supply Disruptions and Strategic Decisions

The White House’s move to blockade sanctioned Venezuelan tankers has added a significant risk premium to oil prices. This strategy reminds us of similar tactics used during the Trump administration, which also led to short-term price spikes. By removing a large amount of heavy crude from the market, this action is tightening global supply at a crucial moment. The latest API report highlighted a notable 9.3 million barrel decrease in US crude stockpiles, which far exceeded expectations. This comes as the Strategic Petroleum Reserve sits at multi-decade lows of just under 350 million barrels, creating little buffer against supply shocks. If the official EIA data shows a similar drop, it could lead to further price increases. At the same time, OPEC+ continues to enforce its production cuts, with November 2025 figures showing strong compliance within the group. Their strategy has effectively helped maintain price stability throughout the year by reducing excess supply in the market. As a result, any unexpected supply disruption, such as the situation in Venezuela, could have a larger impact on prices. We are also keeping an eye on ongoing peace talks regarding the war in Ukraine, which has continued since the 2022 invasion. A successful breakthrough in these negotiations could reduce some of the geopolitical risks that have kept energy prices high in recent years. This possibility remains a major downside risk that could limit any significant price rally. Given the current uncertainty, we expect continued market volatility, making long-term call options an appealing way to gain potential benefits while managing risks. Traders may also explore bull call spreads to lower the entry cost based on a moderately positive outlook. It’s important to wait for confirmation from the EIA report before making significant new investments. Create your live VT Markets account and start trading now.

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