WTI crude oil prices dropped below $58.00, sitting around $57.80 during early trading in Europe on Tuesday. This fall follows US President Donald Trump’s hint about possibly selling Venezuelan crude oil that the US has seized. He also mentioned using this oil to build up the US strategic reserves. The ongoing conflict between Russia and Ukraine is heightening worries about supply issues. Russia’s increased attacks on Odesa, Ukraine, have raised concerns about the impacts on shipping logistics. Traders are waiting for the American Petroleum Institute’s report on crude oil stockpiles, which could affect WTI prices based on inventory changes.

What is WTI Crude Oil?

WTI, or West Texas Intermediate, is a high-quality crude oil with low gravity and sulfur content, mainly produced in the US. It is a key benchmark in the oil market, with prices influenced by factors such as supply, demand, political turmoil, and OPEC’s decisions. The value of the US dollar also plays a role in WTI prices since oil is mostly traded in dollars. Weekly inventory reports from the American Petroleum Institute and the Energy Information Agency indicate the balance between supply and demand, affecting oil prices. OPEC, a group of major oil producers, can influence prices by changing production quotas, significantly impacting the market. As WTI crude hovers around $57.80, we see a classic struggle between negative supply news and positive geopolitical risks. The potential selling of seized Venezuelan oil adds a new supply source, while increasing attacks in the Black Sea threaten current supply routes. This tension suggests volatility will be common in the coming weeks; the CBOE Crude Oil Volatility Index (OVX) has already risen above 35 in response. The possibility of the US selling Venezuelan crude puts a significant cap on prices for now. We recall the market’s reaction when the US released barrels from the Strategic Petroleum Reserve in 2022, which helped lower prices that had surged past $120. With US commercial crude inventories currently at a solid 445 million barrels, any extra supply could easily push WTI prices down to the mid-$50s.

Market Volatility and Risk Factors

However, we cannot overlook the real risk of supply disruptions from the Russia-Ukraine conflict. A successful attack on a significant Russian oil terminal, like the port of Novorossiysk, which ships over 2 million barrels daily, could cause prices to surge sharply. This presents a risk to traders who are betting on lower prices. As it is late December, trading volumes will likely be thin until the new year, which can exaggerate price movements in response to news. Therefore, we are carefully monitoring the weekly API and EIA inventory reports for clues about changing demand during the holiday season as we also look forward to the next OPEC+ meeting in January 2026 for insights on production quotas for the first quarter. Create your live VT Markets account and start trading now.

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