WTI has increased for four straight days, even with an unexpected rise in US crude oil inventories. The US Energy Information Administration reported that inventories grew by 3.72 million barrels, which was more than the anticipated 2.25 million-barrel rise. Still, a small production increase of 137,000 barrels per day from OPEC+ has eased worries about oversupply and helped support prices. Currently, West Texas Intermediate is trading at about $62.25 per barrel, reflecting a daily gain of 0.80%. This comes after rebounding from a previous low near $60.00. While the current outlook is positive, long-term challenges remain, especially since US production is forecasted to reach 13.53 million barrels per day by 2025. This suggests that supply may be abundant in the future.

Geopolitical Factors And Technical Analysis

Geopolitical issues are affecting the market, with possible disruptions from the Middle East and uncertainties regarding sanctions on Russian and Iranian oil. On a technical note, WTI appears vulnerable, trading below its key moving averages. Immediate support is at $61.50, while resistance is near the 21-day Simple Moving Average of $62.78. In the larger picture, WTI is a high-quality American oil and a benchmark in global oil trading. Its price is influenced by supply and demand, OPEC decisions, geopolitical events, and changes in the US Dollar. Inventory reports from the API and EIA also play a significant role in guiding prices. The current market shows a classic conflict: the tight OPEC+ supply decision is pushing prices up, while a bearish increase in US inventories creates downward pressure. US crude output has averaged above 13.4 million barrels per day in the third quarter of 2025, making the EIA’s record production forecast feel quite relevant. This fundamental tug-of-war indicates that prices may face challenges in finding clear direction in the near term.

Strategies For Risk Management And Profit

Given the ongoing geopolitical risks in the Middle East, it’s wise to prepare for an upside surprise. Past price spikes due to regional tensions in early 2024 highlight how quickly conditions can shift. Buying out-of-the-money call options, perhaps with a $65 strike for a December 2025 expiration, provides a low-risk way to benefit from any sudden disruptions in supply. However, the significant challenge posed by record US production shouldn’t be overlooked. Recent reductions in the 2026 global growth forecasts by the IMF add to concerns of potential oversupply if demand weakens. To address this risk, holding put options with a strike price below the critical $60 level could be a smart defensive move. In the upcoming weeks, the technical outlook suggests a range-bound market, with prices currently below both the 21-day and 50-day moving averages. This situation indicates that selling volatility might be a profitable strategy. For example, using option spreads that benefit from prices remaining between approximately $60 and $64 can capitalize on market uncertainty as these competing narratives unfold. Create your live VT Markets account and start trading now.

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