Factors Affecting WTI Oil Prices

WTI Oil prices are mainly influenced by supply and demand. Global economic growth affects demand, while events like political instability can disrupt supply. The strength of the US Dollar is also important because oil is mainly traded in dollars. Weekly oil inventory reports from the American Petroleum Institute and the Energy Information Administration impact WTI Oil prices. When inventories drop, it indicates higher demand and pushes prices up. On the other hand, rising inventories usually lower prices. OPEC’s production decisions also play a big role. Changes in production quotas can either tighten or loosen supply, altering prices. OPEC+ includes non-OPEC members, like Russia, which further influences these factors. Recently, WTI crude oil jumped to $60.04 due to new inventory data. The Energy Information Administration’s report on November 5th revealed a surprising decrease of 2.1 million barrels, while analysts expected a small increase. This indicates that demand is exceeding supply more than was anticipated by the market.

Upcoming OPEC+ Meeting

The demand landscape is complicated, creating uncertainty for the next few weeks. Last month, the International Monetary Fund (IMF) slightly lowered its global growth forecast for 2026 to 2.9%, hinting at a potential decline in oil demand. However, current consumption remains strong, especially in emerging Asian markets, which helps support prices for now. On the supply side, all attention is on the upcoming OPEC+ meeting set for December 4th in Vienna. There are rumors of a split among members, with some wanting to increase production quotas while key players want to maintain current levels to keep prices above $60. This meeting could bring significant volatility to the oil market. Additionally, the US Dollar’s value is helping lift crude prices. After the Federal Reserve suggested a possible pause in interest rate hikes for the first quarter of 2026, the US Dollar Index (DXY) fell to around 103.5. A weaker dollar makes oil cheaper for those using other currencies, generally raising demand. Reflecting on the years 2020 to 2023, we learned how quickly supply and demand shocks can affect the market. The price surge following the events of 2022 reminds us that geopolitical risks can emerge suddenly. While the current market seems calmer, we must be aware of underlying tensions. In the upcoming weeks, we should explore strategies that take advantage of this upward trend while protecting against the uncertainty of the OPEC+ meeting. Using options to buy call spreads might allow for gains if WTI hits the $65 resistance level, while also limiting risk if the meeting results are negative. We see the current $60 price as an important psychological support level to monitor. Create your live VT Markets account and start trading now.

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