OPEC+ has decided to increase oil output slightly for December but will pause any further increases in early 2026. The group plans to add 137,000 barrels per day (bpd) in December and stop output increases from January through March. At the time of this report, the price of West Texas Intermediate (WTI) oil rose by 0.75% to $61.15. WTI oil is a high-quality crude oil from the United States, distributed via the Cushing hub.

Factors Affecting WTI Oil Prices

WTI oil prices depend on supply and demand, influenced by global economic growth, political events, and the US Dollar’s value. Changes in oil inventory data from sources like the API and EIA also affect prices; falling inventories usually signal higher demand. OPEC, made up of 12 oil-producing countries, significantly impacts WTI prices through its production decisions. OPEC+ includes other nations such as Russia. Changes in production quotas can either tighten or release oil supply, which in turn influences prices. With OPEC+ choosing to pause production increases in early 2026, they seem to aim for price stability amid concerns about weak global demand. The small increase of 137,000 bpd for December appears mostly symbolic, as market attention shifts to the forthcoming halt in production. WTI crude is currently priced around $82.15, much higher than in previous years, indicating the cartel is trying to avoid prices dropping back to the $60s. This decision suggests limited potential for rising crude prices soon. The main worry is an oversupply due to forecasts of slowing economic growth from both the IMF and World Bank, particularly noting weakness in China’s manufacturing sector. For traders, this scenario might hinder bullish bets through the winter.

Implications of OPEC+ Decision

The announcement is expected to reduce implied volatility in oil options for early 2026, as it clarifies supply intentions. Traders should think about strategies that benefit from stable prices or lower volatility, like selling out-of-the-money calls or creating iron condors. OPEC+ is signaling a preference for stability rather than pursuing higher prices in a shaky economy. Supporting this cautious view, last week’s EIA report showed an unexpected increase in U.S. crude inventories by 2.1 million barrels, against expectations for a small decrease. This indicates demand might be softening before the usual winter dip. Inventory increases have been noted for three of the last five weeks, raising concerns for the cartel. In contrast to the extreme price fluctuations seen in 2022 due to supply shocks, the current situation reflects a carefully managed supply amid potential demand decline. Therefore, derivative positions should be designed with the understanding that OPEC+ aims to maintain a stable price range instead of facing significant market shifts. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now