WTI crude oil prices rose to about $59.65 during early Asian trading hours on Wednesday. This increase is due to supply disruptions in Kazakhstan, especially at the Tengiz and Korolev oil fields, which have temporarily halted production because of fires. The shutdown may last another seven to ten days. Moreover, Kazakhstan’s crude oil production has dropped by 900,000 barrels per day due to drone strikes affecting the Caspian Pipeline Consortium terminal. Tensions also rise with the US President threatening tariffs on eight European countries related to Greenland, which could reach up to 25% by June 1. Such developments may impact market sentiment and limit further oil price increases.

Wti Oil Influences

WTI Oil, a premium US oil, has a significant effect on global markets. Priced in US Dollars, its value can change with dollar fluctuations. Key factors influencing WTI prices include supply and demand, political instability, and OPEC’s decisions. Important inventory data from the American Petroleum Institute (API) and the Energy Information Agency (EIA) can also affect WTI pricing. A drop in inventory often signals higher demand, which can raise prices. OPEC, made up of oil-producing nations, frequently impacts WTI prices by setting production quotas. Currently, WTI hovers around $78, influenced by ongoing supply risks and a cloudy economic outlook. This situation is similar to brief price spikes caused by past Kazakh outages in the mid-2020s. However, today’s geopolitical tensions in the Red Sea are causing prolonged shipping disruptions, which help keep prices elevated.

Supply Side And Demand Picture

On the supply side, OPEC+ is sticking to its plan, extending production cuts into the first quarter of 2026 to stabilize the market. However, strong non-OPEC supply, especially from the US, where crude output hit a record of 13.3 million barrels per day late last year, is balancing this. This means any sudden disruption could lead to significant price changes. Demand, on the other hand, poses a concern that is preventing major price rallies, unlike the trade war worries we saw in 2025. The IMF recently predicted a slow global GDP growth of only 2.9% this year, citing ongoing economic weaknesses in Europe and China. Last week’s EIA report confirmed this, showing an unexpected crude inventory increase of 2.1 million barrels when a decrease was anticipated. Given this back-and-forth situation, a practical strategy for the coming weeks is to trade options to take advantage of expected volatility. Buying straddles on March futures allows for profit from sharp price changes, whether due to a supply shock or a sudden decrease in demand. We believe implied volatility is currently undervalued, making it a good time to enter such positions. For those who feel moderately bullish, a bull call spread provides a low-risk way to bet on potential price increases. By purchasing one call option and simultaneously selling another with a higher strike price, we can reduce costs while aiming for a move toward the $82 level. It’s essential to manage this position carefully around the weekly API and EIA inventory reports, as another unexpected increase could challenge the bullish outlook. Create your live VT Markets account and start trading now.

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