WTI Oil Rebounds on Middle East Unrest and China Growth Signals

Geopolitical Volatility Returns

Fresh conflict in Yemen and aggressive rhetoric from Iran have reintroduced a risk premium to crude. While the market remains structurally oversupplied, the threat of immediate disruptions to Middle Eastern shipping lanes has forced short-sellers to cover positions ahead of the New Year.

2026 Surplus Caps Upside

Despite the daily gain, WTI is on track for its worst annual performance since 2020. The EIA and World Bank both expect global inventories to rise throughout 2026, which is likely to limit any sustained rallies unless a major supply outage occurs.