West Texas Intermediate (WTI) was trading at about $60.85 during Wednesday’s Asian trading hours. This increase is due to new optimism about the US government possibly reopening and worries about the Russian oil supply. The US House of Representatives will likely vote on a Senate-approved bill to end the government shutdown. If passed, this could raise WTI prices by increasing jet fuel demand. Meanwhile, US sanctions on Russian oil companies like Lukoil and Rosneft are supporting WTI prices, especially as Russian stake sales in Serbia’s Naftna Industrija Srbije continue amid Western sanctions.

OPEC Plus Production Decisions

OPEC+, which includes Russia, has announced a production increase of 137,000 barrels per day for December. However, they will pause any further increases in the first quarter of next year, raising concerns about a possible global oil surplus. WTI Oil is a high-quality crude oil sourced from the US. Various factors, such as changes in supply and demand, political instability, and OPEC’s production choices, affect its price. Weekly inventory reports from the American Petroleum Institute and the Energy Information Administration also influence WTI prices by indicating shifts in supply and demand. Currently, WTI is trading near $82 a barrel, a level showing significant market tension. Concerns about a global economic slowdown are rising, especially after the IMF revised its 2026 growth forecast to 2.9%. This news is limiting price gains. However, OPEC+ is maintaining production discipline, which is preventing sharper price declines. Historically, during the Trump administration, resolving a US government shutdown boosted oil prices, signaling a return to normal economic activity. As we watch current budget negotiations in Washington before the new year, traders should look for signs of political gridlock. A prolonged dispute could lower consumer confidence and travel demand, creating challenges for WTI futures.

Impact of US Crude Inventories

On the supply side, the latest data from the Energy Information Administration revealed a surprising increase of 2.1 million barrels in US crude inventories last week. This suggests that supply may be exceeding immediate demand, putting downward pressure on the market. We need to be cautious, as any unexpected decrease in inventory reports could shift this sentiment quickly. Geopolitical risks are still significant, as ongoing tensions with major producers like Russia add a premium to oil prices, a trend we’ve seen for years. However, OPEC+ decided to maintain production targets in November 2025, creating some uncertainty. If global demand declines more than expected, this steady supply could lead to an oversupply in the first quarter of 2026. Given these mixed signals, we anticipate higher volatility in the coming weeks. For derivative traders, this situation suggests that making straightforward directional bets could be risky. Instead, strategies that benefit from price fluctuations, such as long straddles or strangles, might work better. Traders may also find it useful to consider call spreads to bet on a limited upside or put spreads to guard against a potential downturn driven by weakening economic indicators. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now