WTI Crude Oil drops below $59 as market shrugs off Russian refinery strikes

West Texas Intermediate (WTI) US Oil trades at $58.90 on Thursday at the time of writing, down 0.80% on the day, extending its decline for a third consecutive day. The fall comes amid a wave of risk aversion sweeping global markets, with US equities retreating and investor sentiment turning cautious.

The latest report from the United States Energy Information Administration (EIA) released on Wednesday showed an unexpected surge in US Crude Oil inventories, which rose by 5.2 million barrels for the week ending October 31, far exceeding expectations for a 1.8 million-barrel increase. The data reinforced concerns that supply remains ample, even as global demand continues to show signs of weakness.

At the same time, macroeconomic data from major economies remain fragile. The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) in the United States (US) stayed in contraction at 48.7, while China’s official Manufacturing PMI slipped to 49, signaling declining industrial activity. In the Eurozone, the HCOB Manufacturing PMI rose slightly to 50 but still indicates lackluster demand.

Meanwhile, geopolitical risks continue to simmer. Russia’s Volgograd Oil refinery, operated by Lukoil, halted operations after being struck by Ukrainian drones, according to Reuters. The attack damaged the plant’s primary processing unit, which accounts for roughly a fifth of its capacity. Although the incident highlights ongoing risks to energy infrastructure in the region, it has not yet translated into a significant disruption of Russian crude exports, which, according to Commerzbank, remain robust at around 3.56 million barrels per day.

Adding to the bearish tone, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) recently announced a modest output increase of 137,000 barrels per day for December, while signaling a pause in additional hikes during the first quarter of 2026 to prevent a potential glut. Analysts at ING note that the market is expected to be in “peak surplus” early next year, keeping pressure on prices despite supply uncertainties linked to sanctions and regional tensions.

In this context, expectations for slower global growth, coupled with high US production levels near record highs of 13.65 million barrels per day according to the EIA, are weighing on WTI. Unless risk sentiment stabilizes or significant supply disruptions emerge, Oil prices could remain under pressure in the near term.

WTI Technical Analysis: Crude Oil breaks below $59.50, signaling renewed bearish momentum

West Texas Intermediate (WTI) Crude Oil breaks out of its consolidation range to the downside, slipping below the $59.50 level, which confirms a short-term bearish bias. As the price extends its decline beneath the psychological $59.00 mark, selling pressure is intensifying and could pave the way for a move toward the October 20 low at $55.97.

On the upside, a sustained recovery above $59.50 would be needed to ease the bearish pressure and open the door for a rebound toward the upper boundary of the previous range, near $61.30.