WTI loses momentum as inventory growth caps the recovery

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WTI pressured by inventories and geopolitics

U.S. crude inventories weaken the near-term backdrop

At the same time, the physical market remains considerably tighter than the current price might suggest. The latest EIA data showed U.S. commercial crude inventories rising by 2.97 million barrels to 426.4 million. The increase at Cushing was particularly notable, with stocks rising by 2.27 million to 23.75 million barrels, directly weakening the near-term fundamental backdrop for WTI.

Meanwhile, gasoline inventories fell by around 1.7 million barrels, while distillate stocks declined by 0.4 million. Refinery utilization was running at around 94%, so the increase in crude inventories does not look like the result of a sharp drop in refining activity, but rather a sign of improving supply availability within the U.S.

Middle East risks keep the geopolitical premium alive

The Middle East remains the main source of uncertainty. Flows through the Strait of Hormuz are still significantly below pre-crisis levels, but the market is already pricing in a partial adjustment in logistics: Saudi Arabia is increasing its use of the East-West Pipeline and Red Sea ports, while some export routes are gradually being reconfigured.

As a result, the geopolitical premium has become less one-sided. Any reports of improving shipping conditions or diplomatic contacts quickly put pressure on prices, while new attacks on energy infrastructure or a deterioration in the situation around Hormuz could just as quickly restore the scarcity premium. Additional risks remain in the Red Sea and around Bab el-Mandeb, where security problems continue to lengthen shipping routes and increase transportation costs.

$96 remains the key barrier for buyers

On the supply side, OPEC+ is not adding any new pressure for now: alliance members decided to keep October production levels unchanged from September, while the next meeting is scheduled for early October. As a result, in the coming days WTI is likely to react more strongly to the combination of U.S. inventory data and Middle East developments than to the cartel's policy itself.

The current balance looks fragile: U.S. crude inventories are rising, limiting the recovery, but low gasoline and distillate stocks, combined with ongoing disruptions to global logistics, are preventing bears from taking full control of the market.

For now, attempts to move higher are capped by resistance around $96.00 per barrel, keeping the risk of a break below support at $93.20–92.80 and a decline toward $92.00–91.20. However, as I warned in WTI remains under pressure as geopolitical premium fades, until there is a lasting peace in the Middle East, it is too early to expect a reversal of the broader uptrend.

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