WTI slipped on Thursday after gaining more than 1% in the prior session. It traded near $64.80 during Asian hours. Prices came under pressure after EIA data showed US crude inventories rose by 8.53 million barrels last week.
Total crude stockpiles climbed to 428.8 million barrels, about 3% below the five-year average for this time of year. Prices found some support from rising US–Iran tensions and plans for more talks, although the time and location have not been confirmed.
The US President said a second aircraft carrier could be sent to the Middle East if no agreement with Iran is reached. The comments came as Washington and Tehran prepare to resume discussions.
US labour data showed Nonfarm Payrolls increased by 130,000 in January, following a revised 48,000 gain in December. This beat the 70,000 forecast. The Unemployment Rate edged down to 4.3% from 4.4%.
OPEC kept its demand growth forecasts unchanged: 1.38 million bpd for 2026 and 1.34 million bpd for 2027. It also left its view on non-OPEC supply unchanged. The IEA will publish its monthly report later today, which may indicate a global surplus.
WTI is hovering around $85 a barrel, as the market weighs mixed supply and demand signals. This looks a lot like early 2025, when prices were stuck near $65. The latest EIA report added pressure after it showed an unexpected 4.2 million barrel rise in US crude inventories last week.
In 2025, a much larger 8.53 million barrel build triggered a similar pullback, pointing to strong short-term supply. When inventories rise like this, traders may look at short-dated put options to benefit from near-term weakness. A comparable run of inventory builds also came before the price correction in Q4 2023.
Even so, we think major downside may be limited by today’s geopolitical risk premium. That was also true in 2025, when US–Iran tensions helped support prices. New reports of friction in the Strait of Hormuz are a reminder that any disruption could quickly push prices higher. Because of this risk, holding some long call options can be a sensible hedge against a sudden spike.
Demand also appears steady, which should help put a floor under prices, similar to what we saw a year ago. The January 2026 jobs report showed Nonfarm Payrolls rose by 195,000, while the unemployment rate held at a low 3.9%. A strong labour market supports demand for transport fuels and suggests consumption is holding up.
We are also watching the major agency reports for clearer direction, as we did last year. OPEC’s latest monthly report kept its 2026 demand growth forecast at 1.2 million bpd, pointing to solid economic activity in Asia. The IEA is set to release its outlook tomorrow, and markets expect it to again warn of a possible global surplus due to rising non-OPEC supply.
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