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Crude oil prices fell sharply on Thursday due to concerns over demand following tariff announcements by US President Donald Trump and OPEC+’s decision to raise oil output. OPEC+ has agreed to increase oil output by 411,000 barrels per day starting in May.
At press time, West Texas Intermediate (WTI) was trading at $66.90 per barrel, reflecting a decrease of more than 5% in a single day.
Wti As A Benchmark
WTI oil, a key type of crude oil, is sourced in the US and serves as a benchmark for global oil markets. It is known for its lightness and low sulfur content, making it a high-quality option.
Supply and demand primarily drive WTI oil prices. Factors such as global growth, political instability, and OPEC’s production decisions can influence these dynamics. Additionally, the value of the US Dollar plays a role, as oil is mainly traded in dollars.
Oil inventory data from the American Petroleum Institute (API) and the Energy Information Agency (EIA) also impacts WTI prices. Changes in inventory levels can signal shifts in supply and demand, thus affecting pricing.
OPEC’s production quotas significantly affect WTI oil prices. Reducing production can lead to price increases, while increased production generally results in lower prices. OPEC+ includes additional non-OPEC members, with Russia being a notable participant.
Impact Of Recent Developments
The current state of crude oil markets, especially the latest tumble in West Texas Intermediate (WTI) prices, can be traced back to two key developments. First, a spike in concerns related to global trade, particularly after the announcement of new US tariffs. Second, the decision by OPEC+ to raise production output—specifically, an additional 411,000 barrels per day beginning in May. This two-pronged impact has weakened the outlook for oil demand, just as more barrels appear ready to enter the pipeline.
WTI, valued for its low sulfur content and light quality, often acts as a bellwether for broader market expectations. A single-session drop exceeding 5% isn’t merely a technical dip—it reflects a reassessment. When a benchmark like WTI slides to below $67 per barrel, it’s usually because assumptions around future consumption or inventory movements have shifted.
Demand-side indicators are beginning to flash different signals. Trade policy volatility often reduces industrial forecasts, which then hits commodities like oil. At the same time, an increase in supply, especially announced well in advance as with OPEC+’s update, introduces predictability—but also downward pressure. The supply growth from the extended OPEC+ group, led in coordination with Moscow, tips the balance away from market tightness.
Inventory updates from the API and EIA have added layers of volatility. Weekly stockpile figures act as short-term fuel for intraday movement, and in the coming sessions, they’ll continue to play a decisive role. Any unexpected increase in US crude stocks, particularly in the Cushing, OK, storage hub, could apply further weight to prices. We’ve seen before how the market quickly reprices contract expectations when inventory builds coincide with rising output.
Currency movement also can’t be sidelined. Given that crude is dollar-denominated, any appreciable strengthening in the greenback tends to make oil relatively more expensive for foreign buyers. This extra burden can dent demand from price-sensitive regions. Recent foreign exchange trends suggest some possibility of further support for the dollar, particularly in light of ongoing rate expectations in the US. Traders may want to calibrate for that.
When production forecasting is made easier through clear coalition announcements, some of the speculative edge shifts. Instead, more attention is turned to macro data and near-term consumption figures. That includes refining margins, mobility indicators, industrial output, and increasingly, trade volumes, particularly through the Asia-Pacific corridor.
The choices made by OPEC+ serve as a reminder that supply coordination remains highly responsive to price movements. For anyone navigating volatility, short-term positioning should weigh how much of the supply increase is already priced in, especially as economic indicators begin to soften in key demand centres. Approach upcoming inventory releases with measured scepticism, and remember that initial reactions are often revised within hours.
In this type of setting—where prices respond not just to what is but to what’s expected—a steady watch on weekly EIA forecasts, shipping data, and fiscal policy changes is warranted. We may not be in a tight market now, but there are still pockets of sensitivity. Keep an eye on refinery running rates and crack spreads; these can tell us more about true demand than headline prices. In the near term, oversupply risk is elevated, and we need to gauge how the market digests that, day by day.
