WTI is trading at about $62.65 during the Asian session on Wednesday. This drop is due to fears of production losses from a winter storm in the US, which has disrupted around 2 million barrels per day, about 15% of the country’s total output. Crude exports from US Gulf Coast ports stopped on Sunday, adding to the supply worries. Additionally, tensions in the Middle East may also affect WTI prices.

EIA Report’s Potential Impact

The EIA’s crude oil stockpile report, expected later today, could influence prices based on the inventory levels reported. If stockpiles decrease, it suggests strong demand, which may drive prices up. Conversely, an increase in stockpiles might indicate weak demand, leading to lower prices. WTI Oil is a high-quality crude oil mainly produced in the United States. Its price is affected by supply and demand, geopolitical issues, and the value of the US dollar. Weekly oil inventory reports from the API and EIA are closely monitored, with the EIA considered more reliable. OPEC’s choices on production can also significantly sway WTI prices, changing global supply levels.

Weather-Related Volatility

West Texas Intermediate is holding near $62.65 as we evaluate the effects of the US winter storm. The extreme weather has impacted production, with recent estimates indicating over 700,000 barrels per day were offline in Texas and North Dakota. This supply shock raises the risk of price increases, making short-term call options appealing. We will be watching the EIA stockpile report released later today for signs of tightening supply. If there is a larger-than-expected drop in crude inventories, it will support the bullish outlook and may push WTI towards higher resistance levels. This report is critical for this week, as it will influence short-term price movements. Since weather disruptions are temporary, we expect increased volatility in the upcoming weeks. Traders might use options to navigate this uncertainty as the market balances short-term supply losses against the overall economic picture. This scenario favors tactical trades rather than long-term bets. In addition to the storm, rising geopolitical tensions are bolstering the market. Shipping risks in the Red Sea, where traffic through the Suez Canal dropped by over 40% in late 2025 compared to the previous year, provide price support. These issues limit potential declines, even when US production rebounds from the freeze. However, we also need to think about demand. Recent manufacturing data from China was slightly below expectations, and the latest US inflation report indicated core inflation remains steady at 2.9%. These factors could dampen any significant price increases, suggesting that global demand may not be strong enough to maintain higher prices. As seen with similar weather events in previous years, price spikes can reverse once production normalizes. However, with OPEC+ committed to production cuts through the first quarter of 2026, the overall supply remains tight. This commitment magnifies the effects of any unexpected outages like the current one. Create your live VT Markets account and start trading now.

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