Crude oil prices fell on Thursday as supply fears eased and geopolitical news took center stage. WTI dropped below $63.00 a barrel.
WTI moved lower as markets weighed the possibility of easing US-Iran tensions. Traders also questioned hopes for a sharp rise in demand from China.
Global Demand Outlook Shifts
The International Energy Agency cut its forecast for global crude demand on Thursday. It pointed to weaker-than-expected demand growth in parts of Asia and a market surplus that remains high, even after brief supply-tightness fears in January.
Comments linked to Israel’s Benjamin Netanyahu suggested Donald Trump and Iran’s Ali Khamenei may be moving toward a deal. At the time of writing, WTI was down more than 3.5% from the day’s open.
Prices were also nearing $62.00. That level is close to the 200-day Exponential Moving Average (EMA).
WTI broke below $63 a barrel in early 2025, and that move helped shape today’s market. The drop was driven by easing U.S.-Iran tensions and early signs that China’s post-pandemic demand surge was weaker than expected. These two themes have capped prices for much of the past year.
Supply Demand Balance
Supply pressure from the United States has been steady and has limited any lasting rally. The latest Energy Information Administration (EIA) report showed U.S. crude output averaged a record 13.3 million barrels per day in the final quarter of 2025. This wave of American oil has largely offset OPEC+ production cuts, which the group has extended through the second quarter of 2026.
On the demand side, last year’s skepticism looks justified. China’s economy has not rebounded strongly. Its manufacturing PMI stayed just above the 50-point mark for much of late 2025, pointing to flat growth rather than the strong expansion needed to absorb excess oil. With European forecasts also being downgraded, global demand growth for 2026 looks weak.
In this setting of high non-OPEC supply and soft demand, selling call options may be a sensible approach for the weeks ahead. With WTI trading in a range near $71, selling April calls with strike prices at $77 or higher lets traders collect premium from expected range-bound prices. The strategy can benefit if prices stay flat or drift lower.
Still, traders should watch Middle East headlines closely. The possible U.S.-Iran deal discussed last year never fully took shape, leaving tension in the region. Any surprise disruption in the Strait of Hormuz could trigger a quick spike in prices, so short-volatility positions should be protected with defined risk.
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