OPEC+ has increased production at a challenging time, causing WTI to drop to $58.95.
According to Reuters, March OPEC output declined by 110,000 barrels per day (bpd) despite plans for increased production.
opec output adjustments
This decrease may clarify OPEC’s decisions regarding output adjustments.
Notably, Nigeria, Iran, and Venezuela saw a reduction of 50,000 bpd, with the latter two affected by new US sanctions.
While Venezuela and Iran are not bound by quotas, Nigeria is.
The survey indicates that Saudi Arabia, Iraq, and the UAE have maintained output at or slightly below their production limits.
OPEC+ recently chose to raise output during a period when market conditions appear unstable, leading to a visible sell-off in crude futures. As we observed, West Texas Intermediate (WTI) crude has dropped to $58.95, a level that triggers re-evaluation of positioning across short- and medium-term timeframes. Instinctively, such a downward swing marks a recalibration in sentiment that can’t be ignored, especially if speculative money begins shifting out of long crude exposure in anticipation of added downward pressure.
Despite the group’s publicised decision to ramp up supply, the actual output in March tells a different story. Reuters reported that overall OPEC production slipped by 110,000 barrels per day compared to the prior month. On the surface, that might seem like a contradiction, but it more likely reflects the logistical or political realities that interfere with stated supply increases.
Several member states—Nigeria being one—contributed to March’s aggregate production drop. Nigeria saw cuts even though they are bound by the cartel’s formal quota system, unlike Iran and Venezuela. Both of the latter have been affected by newly imposed US sanctions, constraining their ability to export, particularly through international banking and shipping networks.
saudi arabia iraq and uae production
According to the survey, countries that typically act as production anchors—Saudi Arabia, Iraq, and the UAE—largely held their output steady or marginally below agreed thresholds. That implies discipline among the core producers, although the motivation may lie less in cooperation and more in a recognition that heavier supply at this stage might oversaturate an already fragile demand environment.
So where does that leave us? With WTI sliding fast and the broader market already trimming exposure to oil, we have been monitoring positioning metrics, including open interest and options skew. The fall below $60 aligns with prior support levels from early in the quarter, and we’ve observed selling pressure intensify once it breached that threshold. Put-call ratios are beginning to widen as hedging behaviour picks up—not surprising given the breakdown in price structure we’ve now seen.
What’s most actionable here is not merely the direction of output, but its rate of alignment against demand expectations. Refiners across Asia are showing restrained activity, and inventories have not drawn down in a way that might otherwise support prices. That leaves the physical market looking fairly slack in the near term, and that reality should inform short-duration strategies in derivates tied to crude, especially those targeting front-month contracts.
Given the existing dynamics, we’ve reduced exposure to upside contracts beyond the June window. Instead, we are focusing greater energy on near-the-money puts and bear call spreads, particularly around prompt expiry intervals. Volatility is rising, yes, but not uniformly across the curve. So we’ve found value in exploiting that unevenness, especially when backwardation compresses and conditions flatten across the front of the curve.
None of these moves suggest a long-term bearish view—yet the short-term structure and the behaviour of market makers reveal where tightness is evaporating. Utilizing those indications will be imperative, particularly during shifts in inventory reports or when fresh compliance data from OPEC is released.
We continue to watch the pace of US SPR releases and any related commentary from Washington, as this has a typical knock-on effect on energy futures. Counterparty activity across STRIPS tonnes has been thinner than seasonal norms, and we take that as an early warning that short-term exposure should remain light unless there is a recovery through the $62 handle.
In our view, traders adjusting their books now around the $58 to $60 range have the advantage of time and liquidity. Waiting for confirmation of OPEC’s next meeting outcomes could mean missing the early opportunities that appear when volatility settles after a hard move. Positioning through calendar spreads remains favourable given the softness in prompt months.
By mid-month, we expect refiner demand to provide fresh signals, and open interest patterns will highlight which expiry dates are beginning to attract smarter regional bids. As a rule, volume leads price. That’s where our attention stays fixed.
