WTI Crude Oil dropped after three days of gains, as optimism about a US government funding deal boosted market mood. The October OPEC report showed steady demand but highlighted increased production from OPEC and non-OPEC countries, raising concerns about oversupply. WTI Crude was trading at about $60.14 per barrel, down 1.2%, as US lawmakers prepared to vote on reopening the government. This progress improved market sentiment and slightly strengthened the US Dollar, making oil more expensive for foreign buyers.

Oversupply Concerns and Demand Forecasts

Concerns about oversupply continue, according to the OPEC Monthly Oil Market Report. It kept its 2025 oil demand growth forecast at 1.3 million barrels per day, predicting an average demand of 105.1 mb/d. Production from non-OPEC countries, including the United States, is expected to rise by 0.8 mb/d in 2025, with an additional increase of 0.6 mb/d in 2026. Traders are eagerly awaiting the delayed US EIA inventory report, which is expected to show a 1.0 million-barrel rise in crude stockpiles after last week’s 5.2 million-barrel increase. WTI Oil prices are influenced mainly by supply, demand, geopolitical factors, and the strength of the US Dollar. The recent rise in WTI is losing momentum as fundamental factors take the lead. The latest OPEC report indicates that both OPEC and non-OPEC producers have abundant supply ahead. This creates a cautious tone as we await Thursday’s EIA report, which is also likely to show a build in crude stocks. Government data reveals that US crude output hit a record 13.5 million barrels per day in October 2025. On the demand side, recent PMI data from China is slightly below the 50-point mark, indicating a small contraction and raising concerns about future energy use. This mix of rising supply and potentially falling demand creates a bearish outlook for prices.

Market Dynamics and Potential Strategies

We have seen this type of market behavior before, creating chances for smart traders. In the fourth quarter of 2023, rising non-OPEC supply and demand concerns caused WTI prices to drop by over 20% in just a few months. The current market dynamic, with WTI around $60, mirrors that earlier situation. Given this outlook, we should consider strategies that could benefit from falling prices or sideways movements in the coming weeks. Buying put options with strike prices near $58 or $55 for December 2025 or January 2026 delivery could provide a direct bearish position with defined risk. Alternatively, selling call credit spreads with strike prices safely above $62 could help generate income if prices stagnate or decline from here. Create your live VT Markets account and start trading now.

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