OPEC+ agreed on Sunday to raise oil output quotas by 206,000 barrels per day for May, Reuters reported. The group also referred to the need to protect international maritime routes to keep energy supplies moving.
OPEC+ reported concern about attacks on energy infrastructure, which reduced overall supply availability. At the time of writing, WTI was up 1.73% on the day at $105.35.
What Is WTI
WTI stands for West Texas Intermediate and is one of three major crude types, alongside Brent and Dubai. It is described as “light” and “sweet” due to low gravity and low sulphur content, and it is sourced in the United States and distributed via the Cushing hub.
WTI prices are driven by supply and demand, including global growth, political events, wars, and sanctions. OPEC decisions and the value of the US Dollar can also affect prices because oil is mainly traded in US Dollars.
Weekly inventory reports from the API and EIA can move WTI prices by showing changes in supply and demand. Their results are usually similar, falling within 1% of each other 75% of the time, and the EIA report is released one day after the API report.
OPEC has 12 oil-producing members that set production quotas at twice-yearly meetings. OPEC+ adds ten non-OPEC countries, including Russia.
Market Outlook And Key Drivers
The OPEC+ decision to raise output by a mere 206,000 barrels per day for May is being seen as a token gesture. With West Texas Intermediate crude holding strong above $105, this minor supply increase is unlikely to satisfy a market concerned with tight fundamentals. We believe this move signals that the group has limited spare capacity or is unwilling to significantly curb the price rally.
On the demand side, the outlook remains incredibly robust, far outweighing the planned supply increase. The International Energy Agency’s latest report from March 2026 revised global demand growth for this year upward to 1.7 million barrels per day, citing stronger than anticipated economic activity. This suggests the market will easily absorb the extra barrels and will likely remain undersupplied.
Supply risks also continue to be a primary driver of price, justifying the high premium we are seeing. The group’s concern over maritime routes is not unfounded, as disruptions to shipping in the Red Sea have persisted through the first quarter of 2026, tightening the supply of physical crude to key markets. Looking back at the similar instability we navigated throughout 2025, these geopolitical factors will continue to support prices.
The most recent inventory data from the Energy Information Administration (EIA) confirms this tight supply picture. Last Wednesday’s report showed an unexpected draw of 4.1 million barrels from U.S. commercial crude stockpiles, defying analyst expectations of a small build. This is the third consecutive weekly draw, indicating that demand is consistently outpacing available supply ahead of the summer driving season.
For the coming weeks, we see the path of least resistance as being to the upside. Traders should view any price dips as buying opportunities, potentially using call options or bull call spreads to position for a move toward the $110 level. The combination of strong demand, persistent geopolitical risk, and shrinking inventories creates a powerful tailwind for crude oil prices.
