$WTI crude jumped 2.39% to $60.59 on November 17 after hitting $58.80 just four days earlier.
That's a $1.79 swing in a market the IEA says is drowning in oversupply.
The reason? Ukrainian drones struck Russia's Novorossiysk oil port, a facility that handles 700,000 barrels per day of Black Sea exports. Refineries in Saratov took hits too.
But, current oil prices sink 3% as U.S. inventories deepen oversupply fears (as for November 19, 2025).
When critical infrastructure gets targeted, prices move fast.
What We Know
The rally wasn't driven by fundamentals. Global oil inventories are rising.
The IEA projects supply will exceed demand by 2–3 million barrels daily. That's structural oversupply, not a tight market.
But geopolitical risk doesn't care about supply curves. Ukraine targeting Russian oil infrastructure created immediate supply disruption fears.
Natural gas rallied alongside crude as heating season demand kicked in. Energy assets got a bid as an inflation hedge during broader risk-off moves.
The EIA forecasts Brent crude averaging $54 per barrel in Q1 2026, with $WTI trading in a $55–62 range for the next three months. That's a sideways-to-down bias, not a breakout setup.
Market Moves
Oil at $60 reflects a tactical bounce within a structural downtrend. The supply-demand imbalance hasn't changed. Russia's export capacity will adjust. The market knows this.
Compare this to semiconductors in 2025, where supply constraints are creating real shortages. Energy is the inverse—supply-driven oversupply with occasional geopolitical spikes.
That asymmetry matters for portfolio construction.
Energy ETFs
$XLE gained 2.53% last week and benefits if $WTI holds above $62. But it's trading near technical resistance.
$USO offers direct crude exposure for range-bound traders willing to manage volatility.
$DBC provides broader commodity exposure across oil, natural gas, and agriculture if you want diversification beyond energy.
None of these are buy-and-hold positions right now. The fundamentals don't support sustained upside.
Bottom Line
This bounce is tactical, not structural.
Use any rally above $62 to trim energy ETF positions.
The IEA's oversupply warning is the baseline reality. Geopolitical flare-ups create trading opportunities, not investment theses.
Don't chase a rebound driven by drone strikes.
The three-month range is $55–62. Trade accordingly.
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Disclaimer: This is not financial or investment advice. Do your own research and consult a qualified financial advisor before investing.