WTI tumbles below $56.00 as OPEC+ accelerates output hikes

WTI price loses momentum to near $55.75 in Monday’s Asian session, down 4% on the day. OPEC+ is set to further speed up oil output hikes, weighing on the WTI price. Iran said it will strike back if the US or Israel attacks. West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $55.75 during the Asian trading hours on Monday. The WTI price falls after the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to surge production by 411,000 barrels per day in June. OPEC+ agreed on Saturday to increase output by another 411,000 barrels per day in June. The decision follows a surprise move in April by agreeing to a bigger-than-expected output hike for May despite weak prices and slowing demand. Reuters reported that this could bring back to the market as much as 2.2 million barrels per day by November. Oil prices in April posted the biggest monthly loss since 2021, as US President Donald Trump’s tariffs have raised concerns over a recession that will slow demand at the same time that OPEC+ is quickly increasing production. Meanwhile, the escalating geopolitical tensions in the Middle might cap the downside for the WTI. Israeli Prime Minister Benjamin Netanyahu has vowed to retaliate against the Houthis after a missile fired by the group struck the grounds of Israel’s main airport. Iran’s Defence Minister Aziz Nasirzadeh said on Sunday that Tehran would strike back if the US or Israel attacked. WTI Oil FAQs WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia. Source: https://www.fxstreet.com/news/wti-tumbles-below-5600-as-opec-accelerates-output-hikes-202505050159