WTI is stable at about $60.60 in early European trading. This comes after President Trump decided against imposing tariffs on European countries, which has reduced geopolitical tensions. The International Energy Agency (IEA) is cautious about the oil market, predicting that supply will exceed demand. Additionally, US crude inventories are reported to have risen by 3 million barrels last week, which further impacts supply levels.

Production Disruptions in Kazakhstan

Kazakhstan’s oil production has faced temporary interruptions due to two recent fires. Tengizchevroil, which is operated by Chevron, has stopped operations at the Tengiz and Korolev oilfields because of these incidents. WTI Oil is a high-quality crude from the United States and serves as a global market benchmark. Its price is influenced by supply, demand, geopolitical events, and the US Dollar since oil is primarily traded in this currency. Weekly reports from the American Petroleum Institute (API) and the Energy Information Administration (EIA) significantly affect WTI prices. These reports track inventory changes; decreasing stocks suggest rising demand, while increasing stocks indicate higher supply. OPEC’s production decisions also greatly influence price movements. Looking back to 2025, WTI prices were stable around $60.60 per barrel. The market was influenced by reduced geopolitical tensions, like the brief dispute over Greenland, alongside major supply concerns from the IEA. This created a sideways market with little drive to push prices higher.

Market Dynamics in 2025

Today’s situation is different: prices are much higher, recently reaching $78.20. The oversupply fears from last year didn’t fully materialize, thanks to unexpectedly strong demand recovery in Asia and OPEC+ maintaining strict production quotas. This change has shifted the market from being range-bound to a more defined uptrend. The supply overhang that kept prices low has significantly eased, supported by the latest inventory reports. The most recent EIA report showed a surprising reduction of 2.1 million barrels in inventory, a sharp contrast to the 3-million-barrel increase we saw a year ago. With rising prices and renewed tensions in the Strait of Hormuz, we can expect increased market volatility in the upcoming weeks. Traders might want to consider options strategies that benefit from price fluctuations, like long straddles, instead of just betting on price direction. The muted reactions to minor political news in 2025 have shifted to sharp responses to any signs of supply disruption. It’s also wise to watch for opportunities in calendar spreads. The market structure has tightened, transitioning from concerns about an oversupply last year to worries about a tight market. This could mean front-month contracts may trade at a higher premium than those for later dates, suggesting that positioning for a steepening backwardation could be a profitable strategy. Create your live VT Markets account and start trading now.

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