Market Focus Shifts To Supply Risk
US crude stock data also added pressure to prices. The EIA reported that inventories rose by 6.156 million barrels in the week ending 13 March, after a 3.824 million-barrel rise the week before, versus a 400,000-barrel increase expected by the market. Markets are watching for developments that may affect the duration and scope of the conflict. Iranian officials said the response to Israel’s assault on South Pars “is underway and not yet complete”, which could affect supply risk and near-term WTI pricing. We see oil prices easing off the $93.50 mark as leaders try to calm the markets with words of de-escalation. This dip might be a short-term reaction, as the ongoing conflict and damaged infrastructure create a very nervous environment. This suggests a period of high volatility, which can present unique opportunities for traders who are prepared. The massive build in US crude stocks, adding over 6 million barrels against expectations of a tiny increase, is a strong bearish signal for now. This isn’t a one-off event; we’ve seen US production hovering near record highs of 13.4 million barrels per day while refinery utilization sits at a slightly sluggish 88%. This fundamental picture points to a well-supplied market in the United States, which could limit how high prices can go.Options Strategies For An Unclear Direction
However, the risk of a sudden price spike is extremely high due to the physical damage in the Persian Gulf and Iran’s threat of further action. Looking back from our 2025 perspective, we only have to remember the drone attacks on Saudi facilities in 2019 to see how quickly millions of barrels of supply can be knocked offline. Therefore, buying protective call options or call spreads seems prudent to hedge against a repeat of that kind of supply shock. With strong bearish inventory data fighting against bullish geopolitical headlines, picking a clear direction is a gamble. This is a classic setup for a volatility play using options. Strategies like a long straddle, which involves buying both a call and a put option, could pay off if the price makes a sharp move in either direction in the coming weeks. Create your live VT Markets account and start trading now.
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