West Texas Intermediate (WTI) crude oil is currently trading at about $61.90 during Asian trading hours. Rising geopolitical tensions are pushing WTI prices higher as traders proceed with caution. Ukraine has increased its attacks on Russian oil refineries, posing a threat to Moscow’s refining capacity. Meanwhile, the US Energy Information Administration has reported a rise of 1.792 million barrels in US crude stockpiles over the last week.

US Crude Stockpiles and Production Expectations

This increase is higher than the expected rise of 1.5 million barrels. A potential US federal shutdown could delay the release of the September employment report. There are expectations that OPEC+ might boost production in November. Saudi Arabia plans to regain market share, which could mean tripling the increase in production from October. WTI oil, which comes from the US, is recognized for its low density and low sulfur content. It is traded through the Cushing hub. Its price is significantly influenced by supply, demand, and geopolitical issues. Rising global growth leads to higher demand, while political instability can disrupt supply. Changes in oil prices also depend on the value of the US dollar, as oil is traded in dollars. Inventory reports from the American Petroleum Institute and EIA show changes in supply and demand. If inventories drop, oil prices can rise; if inventories increase, prices may fall.

OPEC Production and Geopolitical Risks

OPEC’s production choices directly impact WTI prices and the global oil market. Currently, WTI is trading close to $62, caught between two opposing forces. Ongoing attacks on Russian refineries present a risk to supply that could drive prices up. However, the unexpected rise in US crude inventories last week is putting downward pressure on prices. The potential for OPEC+ to raise production in November is critical to monitor. The production cuts in 2022 and 2023 helped stabilize prices above $70, so any reversal could affect the market. With OPEC+ controlling over 40% of global oil production, any official actions to reclaim market share would have immediate effects. On the flip side, attacks on Russian refineries cannot be overlooked since they threaten actual supply. Previous similar campaigns have taken more than 10% of Russia’s refining capacity offline at times, leading to real supply shocks. We saw oil prices soar beyond $100 when the conflict began in 2022, highlighting the market’s sensitivity to this region. The US government shutdown introduces significant uncertainty, as we may not receive important economic data, like the September jobs report. This lack of information makes it hard to assess demand and could result in sharp, unpredictable price swings in the upcoming weeks. Therefore, exploring options strategies like straddles or strangles may be wise to take advantage of this anticipated increase in volatility. Create your live VT Markets account and start trading now.

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