**WTI Crude Oil Inventory Increase** The US Energy Information Administration has announced a notable rise of 5.2 million barrels in US Crude Oil inventories for the week ending October 31. This news raises concerns about oversupply as global demand remains uncertain. Economic indicators from major economies are still shaky. The US Manufacturing PMI is at 48.7, which indicates contraction. China’s PMI has fallen to 49, and the Eurozone’s PMI is slightly above at 50, reflecting ongoing weak industrial demand. Despite geopolitical issues, like drone strikes at Russia’s Volgograd Oil refinery, Russian crude exports remain steady at 3.56 million barrels per day. OPEC+ has decided to increase output slightly but will hold off on further increases until 2026 to prevent oversupply. US production continues to be high, nearing 13.65 million barrels per day, and fears of an economic slowdown are adding pressure on WTI. Without significant changes, oil prices may stay low in the near term. **Bearish Market Sentiment** Crude oil prices are declining as the market is concerned about a possible oversupply and fading global demand. The recent drone strikes on Russian refineries are being overlooked because the economic outlook is too weak to support price increases. This trend suggests a downward path for prices. The surprising 5.2 million barrel rise in US crude inventories is a strong bearish signal. A similar rise happened in late 2023, leading to a price drop of over 20% that quarter. This historical trend implies current supply levels will continue to weigh on prices. The slowdown in factory activity, with the US manufacturing PMI at 48.7 and China’s at 49, points to reduced energy consumption ahead. A similar situation occurred throughout 2023, where ongoing weakness in global manufacturing data lowered oil prices significantly. This suggests that demand is unlikely to provide support in the near future. OPEC+’s decision to pause output increases until 2026 shows that even major producers are worried about a possible oversupply. Their cautious approach indicates they do not expect market conditions to improve soon. As a result, any potential price rises should be viewed with skepticism, as producers are preparing for a surplus. The market’s indifference to the Russian refinery attack reflects a strong bearish sentiment. While this complacency supports short-term negative positions, it also poses a risk; a significant disruption to Russian exports could lead to a sharp price increase. For now, however, current supply data is keeping this risk out of the market. From a trading standpoint, the decline below $59.50 confirms that sellers are in charge. This makes buying put options with strike prices around $57 or $58 a smart strategy, aiming for a potential decrease toward the October 2025 low of $55.97. Alternatively, selling call spreads with strike prices well above the $61.30 resistance level could generate income while wagering on a lack of strong price rebounds. Create your live VT Markets account and start trading now.

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