West Texas Intermediate (WTI) US Oil was trading around $59.50 on Friday, marking a 1.60% daily increase after touching a high of $60.47. This recovery in crude oil prices followed a Ukrainian drone attack that damaged an oil depot at Russia’s Novorossiysk Black Sea port, a critical export hub. Regional authorities reported that strike debris hit a trans-shipment facility and coastal structures, immediately sparking concerns about potential supply disruptions.
Further bolstering oil prices are the impending US sanctions against Russian oil flows, set to take effect on November 21. Lukoil, a major Russian private producer, has reportedly started scaling back staff in its global trading divisions, suggesting market preparations for reduced operational flexibility. Analysts caution that a substantial volume of Russia’s seaborne crude exports could become marooned, particularly as rerouting efforts are hindered by India and China recently pausing their Russian crude acquisitions.
However, this geopolitical uplift is clashing with more significant fundamental pressures. The International Energy Agency (IEA) forecasts a surplus exceeding 2.4 million barrels per day in 2025, expanding to over 4 million in 2026, despite continued global demand growth. These predictions align with those from OPEC+, which has been boosting output since April and anticipates another moderate market surplus next year.
In the United States, the Energy Information Administration (EIA) reported a much larger-than-expected build in crude oil inventories this week, reinforcing worries about an already saturated market. These escalating stockpiles coincide with US oil production nearing record highs, contributing structural downward pressure on prices.
Consequently, WTI’s rebound is primarily driven by geopolitical risks, but its upward movement is still limited by underlying fundamentals that suggest ongoing weakness. Traders are now monitoring developments regarding US sanctions, Russian supply dynamics, and forthcoming monthly reports from the IEA and OPEC+, which will be crucial in determining the sustainability of the recent oil price recovery
