OPEC+ has decided to boost oil production by 548,000 barrels per day starting in September. This follows earlier moves to lift production limits more quickly than expected. Initially planned to take 18 months, the full 2.2 million barrels per day reduction is now fully lifted ahead of schedule. The United Arab Emirates has seen an increase in its production baseline, adding 300,000 barrels per day over the last six months. In the United States, the number of drilling rigs is dropping due to oil prices staying below $70 and declining top-tier inventory.

OPEC’s Holding Capacity

OPEC is currently holding back 1.65 million barrels per day and plans to review this before the end of the year. The meeting on September 7 may provide more information that could further affect oil prices, which recently dropped by $2. With OPEC+ confirming the 548,000 barrel per day boost for September, there is immediate downward pressure on oil prices. This change completes the reversal of the 2.2 million barrel per day cuts announced in 2023. The market seems to have adjusted to this supply increase, contributing to the recent price decline. This negative outlook is reinforced by new data. The latest report from the Energy Information Administration (EIA) for the week ending August 1, 2025, revealed an unexpected U.S. crude inventory increase of 2.1 million barrels, conflicting with analysts’ predictions of a slight decrease. With WTI crude priced around $68, these inventory levels indicate that supply is exceeding immediate demand.

Focus For Traders

At the same time, we are observing a slowdown in future U.S. oil production, which may create a bullish outlook later this year. The number of U.S. oil drilling rigs has dropped to 495, down from over 550 at the start of 2025. Lower prices and exhausted prime drilling locations are reducing activity. This trend suggests that non-OPEC supply growth may be limited in the near future. However, the key focus for traders should be the upcoming OPEC+ meeting on September 7. The group is still holding back 1.65 million barrels per day, and any indication about releasing that supply will significantly affect the market. This uncertainty leads to a high-volatility environment, making it ideal for options strategies. Historically, we have seen large price fluctuations around important meetings. For example, there was significant price volatility during the 2020 production cuts and a sharp decline in late 2014 when OPEC chose not to cut supply amid oversupply. The current situation feels similar, as a decision to release more barrels could further drop prices. Given the current oversupply and future uncertainties, buying put options on crude futures for September or October seems like a smart strategy. This approach allows you to profit from a potential price decline leading up to or after the next OPEC+ meeting, while also limiting your maximum risk. It’s a clear way to position yourself for the bearish trends we are experiencing today. Create your live VT Markets account and start trading now.

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