WTI oil prices were around $57.85 in early European trading on Tuesday, following stalled US-led peace talks in Ukraine. There was no significant progress made between US President Trump and Ukrainian President Zelenskiy regarding territorial issues. A recent drone strike accusation by Russia against Ukraine has made peace talks more difficult, which might support WTI prices. Despite these geopolitical tensions, there are worries about an oversupply of global oil, as OPEC+ announced a modest increase of 137,000 barrels per day for December.

The Upcoming API Report

The upcoming American Petroleum Institute (API) report on crude oil stockpiles could impact WTI prices. A decrease in inventory could signal stronger demand and raise prices, while an increase might indicate weaker demand, potentially lowering prices. WTI oil, a key benchmark in oil markets, is called “light” and “sweet” because it has low gravity and low sulfur content. It comes from the US and is traded around the world, and its price is affected by supply and demand, geopolitical events, and OPEC decisions. Both the API and EIA release weekly oil inventory data that shows changes in supply and demand. While the EIA is seen as more reliable, both reports usually align within 1%. OPEC, made up of 12 nations, can influence WTI prices by changing production quotas.

WTI Crude Oil Outlook

As we near the end of 2025, WTI crude oil is trading at an unstable $88.20 per barrel, a notable rise from the under $60 levels during earlier stages of the Ukraine conflict. The ongoing geopolitical risk tied to the frozen conflict in Eastern Europe keeps prices high. Renewed tensions in that area could push prices toward $100 in the first quarter of 2026. Previous drone strikes and failed peace talks have created a long-term instability that keeps the market nervous. We experienced similar volatility during the Iran-Iraq war in the 1980s, which sustained oil prices for years. Therefore, holding some long-term call options could be a smart move as a hedge against sudden escalations in the coming weeks. On the supply side, the OPEC+ meeting on December 4th, 2025, led to an agreement to keep current production levels into the new year. Their statement mentioned concerns about a slowdown in global industrial output, with China’s recent PMI data falling to 49.8, just below the 50-point mark indicating contraction. This supply restriction helps balance worries about dipping demand. Looking ahead, inventory data will be very important. December 2025 EIA reports have shown larger-than-expected drops in crude stockpiles, averaging 3.2 million barrels per week due to cold weather across North America. This week’s API and EIA reports will be closely analyzed to see if the busy holiday travel season has maintained strong demand. Due to high implied volatility, traders should think about defining their risk with strategies like bull call spreads to bet on a continued winter rally. On the other hand, if positive news comes out of Eastern Europe unexpectedly, it could lead to a sharp drop in prices. Buying put options for February or March 2026 could yield significant returns if the geopolitical risk premium starts to decrease. Create your live VT Markets account and start trading now.

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