Insights 
VT 
West Texas Intermediate (WTI), the US crude oil benchmark, is trading at approximately $55.75 during Asian trading hours on Monday. This follows an agreement by the Organization of the Petroleum Exporting Countries and allies (OPEC+) to raise production by 411,000 barrels per day in June.
The decision by OPEC+ to increase output was made on Saturday, marking a continuation from April’s unexpected hike for May. This move could result in up to 2.2 million barrels per day being reintroduced to the market by November.
Geopolitical Factors
April saw the largest monthly loss in oil prices since 2021, partly due to US tariffs increasing recession fears and slowing demand amid rising production. Geopolitical tensions, such as those in the Middle East, might limit further declines in WTI prices.
WTI Oil is a major crude oil type, also known as “light” and “sweet” due to its low gravity and sulfur content. As a benchmark for oil markets, its price is influenced by factors like global growth, political instability, and currency value.
API and EIA’s weekly oil inventory reports impact WTI Oil prices by indicating supply and demand changes. OPEC’s decisions on production quotas can also significantly impact WTI Oil prices.
From where we currently stand, this latest production decision signals how OPEC+ is proceeding with caution—though simultaneously moving forward in reinstating barrels taken off the table during previous cuts. That increase of 411,000 barrels daily for June, originating from Saturday’s meeting, appears aimed at pacing the build-back of supply whilst avoiding a fresh supply-demand mismatch.
By now, we can presume that if this pattern continues and the full reintegration of 2.2 million barrels per day occurs by November, market participants are likely to experience gradually shifting dynamics in futures pricing. The production volumes re-entering the system, though perhaps manageable in the short term, suggest growing pressure on the lower end of WTI’s current trading corridor, especially as inventories react.
Near Term Volatility
Following April’s sharp descent—the worst seen since 2021—there’s little surprise that geopolitical uncertainty continues to serve as a backstop for further declines. The combination of slowing global demand, sparked in part by trade tensions and recession-related concern, with rising supply hasn’t created the kind of stabilising effect one might normally expect. Instead, it’s added complexity to positions and increased delta sensitivity in shorter-end contracts.
We’re keeping close attention on the API and EIA reports, as changes in inventory figures have typically triggered intraday shifts. Strong builds in crude stocks, particularly at Cushing, can offset the stabilising nerves around geopolitical hotspots, while sharp draws hint at tightening supply that might not be visible in production statistics alone. For those positioned in shorter expiries, the week-over-week data remains essential.
With WTI still holding above $55 but below prior support ranges, near-term volatility linked to any divergence in reported inventory or lingering macro policy rhetoric—particularly from Washington—shouldn’t be underappreciated. There’s also the matter of how quickly newly added barrels reach real consumption markets, as refining capacity and transportation bottlenecks can create time lags that aren’t always priced accurately in the curve.
Brent-WTI spreads may come into play more decisively as arbitrage opportunities arise. A narrower spread could hint at softer export interest in U.S. barrels, while any widening could entice more shipments abroad. For those with exposure to inter-commodity spreads, this movement remains instructive. Furthermore, with WTI’s low sulfur content—its famed “sweetness”—the physical attractiveness of the crude doesn’t always align with headline numbers; thus, basis trades and regional dislocations should be examined closely.
Weekly positioning shifts in the derivatives space have shown a tilt towards hedging, possibly suggesting a wait-and-see approach among institutions rather than aggressive speculation. As we continue tracking these movements, attention should remain on not just the volume added by OPEC+, but also on how regional refiners and global buyers respond through crack spreads and procurement behaviour.
By looking at the futures curve, we’re beginning to notice a mild downward slope near the front—an indication that supply confidence is reasserting itself, at least temporarily. However, watching backwardation’s degree over the next several sessions could offer clues about whether the market still sees tightness ahead or is beginning to price in balance returning faster than expected.
