West Texas Intermediate (WTI) US Oil has seen a slight dip but remains steady due to temporary production issues in the U.S. The effects of a winter storm are lessening, but full supply restoration is still pending. Ongoing tensions in the Middle East keep a risk premium in the market, with WTI priced at $60.50—a 0.25% drop from the previous day.

Impact Of Winter Storm On Production

U.S. producers experienced production losses of up to two million barrels per day over the weekend because of the storm. The Permian Basin alone saw a drop of 1.5 million barrels per day, but this loss has now decreased to 700,000 barrels per day, with full recovery expected by the end of the month. Market attention remains on geopolitical risks, especially the rising tensions between the U.S. and Iran. Kazakhstan is slowly restoring production at the Tengiz Oil field. This, along with ongoing supply issues, creates a complicated outlook for WTI prices. The American Petroleum Institute’s upcoming report on U.S. oil stocks may offer more insights into supply and demand trends. WTI Oil is a key benchmark in global markets, known for its high quality as a light, sweet crude oil. Its price is affected by global demand, geopolitical events, and the U.S. dollar. Weekly inventory reports from the API and EIA strongly influence prices by reflecting supply and demand shifts. OPEC’s production choices also significantly impact price movements. Currently, WTI oil is hovering around $60.50, influenced by two opposing forces. The market is balancing the temporary recovery of U.S. supply against ongoing conflict risks in the Middle East. This tug-of-war causes uncertainty in the short term.

US Production Levels And Inventory Reports

The impact of the winter storm on U.S. production is fading quicker than expected, with production from the Permian Basin increasing again. It’s important to note that U.S. production hit a record high of over 13.3 million barrels per day in late 2025, a number that continues to weigh on the market. This strong supply suggests that any price spikes from temporary outages are likely to be brief. Last week’s Energy Information Administration (EIA) report indicated a surprising inventory increase of 1.2 million barrels, suggesting that demand might be weaker than expected for this time of year. This information supports a bearish outlook, indicating that ample supply is available in the U.S. Traders should closely monitor this week’s API and EIA reports for confirmation of this trend. At the same time, the geopolitical risk premium is significant, providing a safety net for prices. Tensions involving Iran and shipping disruptions throughout 2025 have shown how quickly supply chains can be affected. Any escalation could instantly add several dollars to the price of a barrel. We must also consider OPEC+, which decided in the fourth quarter of 2025 to extend its voluntary production cuts into the new year. This coordinated effort aims to keep global supply tight and prevent prices from falling too low. The continued support from major producers counterbalances the increase in non-OPEC output. Given these conflicting signals, we expect a period of increased volatility, likely keeping prices within a specific range. This environment may offer opportunities for options traders who can benefit from price fluctuations without betting on a single direction. Strategies like iron condors might be worth considering for those who believe prices will remain stable. Create your live VT Markets account and start trading now.

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