West Texas Intermediate (WTI) futures on the Nymex rose 1.7% near $59.30 during the Asian trading session on Monday. The oil price attracts big bids at the open as OPEC+ agrees to stop increasing oil production from the first quarter of 2026.
This year, the price of oil has remained under pressure as OPEC+ members have increased production by 2.9 million barrels per day in the market since April 2025. The announcement to stop increasing oil supplies came at a time when the United States is making efforts to bring peace to the war between Russia and Ukraine.
It is possible that the United States will lift sanctions imposed on Russia if it agrees to achieve peace with Ukraine. Such a scenario would stimulate global oil supplies.
In addition, OPEC+ agreed to a mechanism that would assess members’ maximum production capacity for use in setting production baselines from 2027, upon which members’ production targets would be set, Reuters reported.
Meanwhile, strong hopes for an interest rate cut by the Federal Reserve at this month’s monetary policy meeting are also supporting oil prices. Lower interest rates by the Federal Reserve bode well for the oil demand outlook.
According to the CME FedWatch tool, the probability that the Fed will cut interest rates by 25 basis points to 3.50%-3.75% in December is 87.4%.
Frequently asked questions about West Texas Intermediate crude oil
West Texas Intermediate oil is a type of crude oil that is sold in international markets. WTI stands for WTI, and is one of three main types including Brent and Dubai crude. WTI is also referred to as “light” and “sweet” due to its relatively low gravity and sulfur content, respectively. It is considered a high quality oil and easy to refine. It is sourced from the United States and distributed through the Cushing Hub, considered the “pipeline crossroads of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.
Like all assets, supply and demand are the main drivers of the price of WTI. 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 affect prices. Decisions by OPEC, a group of major oil-producing countries, are another major driver of the price. The value of the US dollar affects the price of WTI, as oil is mostly traded in US dollars, so a weak US dollar can make oil more affordable and vice versa.
Weekly oil inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI. Changes in inventories reflect fluctuations in supply and demand. If data shows a decline in inventories, this could indicate increased demand, leading to higher oil prices. High inventories can reflect increased supply, causing prices to fall. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, falling within 1% of each other 75% of the time. EIA data is more reliable, because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 oil-producing countries that collectively decides production quotas for member countries at meetings held twice a year. Their decisions often affect WTI prices. When OPEC decides to cut its quotas, it can tighten supply, causing oil prices to rise. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, most notably Russia.
