West Texas Intermediate (WTI) Crude Oil prices dropped 2.5% on Monday, marking a weak start to the trading week following the Organization of the Petroleum Exporting Countries’ (OPEC) announcement of a tentative plan to increase global oil production. The decision, aimed at balancing supply with rising global demand, raised concerns about oversupply, pressuring oil prices to fresh multi-week lows.
OPEC’s Production Strategy
OPEC’s latest statement signals a “gradual and flexible” increase in voluntary production caps starting in April, contingent on favorable global economic conditions and rising oil demand. However, the cartel emphasized its right to pause or reverse the decision if market fundamentals deteriorate.
Despite OPEC’s coordinated approach, internal divisions among member states could complicate the plan. Historically, some OPEC countries have prioritized selling more crude oil to meet budgetary needs, while others prefer to maintain low output to support higher prices.
The move comes amid pressure from U.S. President Donald Trump, who has consistently advocated for lower oil prices as part of his economic agenda.
WTI Price Performance
Monday’s sell-off pushed WTI crude futures to a fresh 12-week low of $68.25 per barrel, extending the commodity’s losing streak to six consecutive weeks. The bearish momentum follows a rejection from the 50-day Exponential Moving Average (EMA) near $71.50, with prices now well below the 200-day EMA at $73.00—a key technical indicator.
Market Outlook
WTI remains vulnerable to further declines if the oversupply narrative gains traction. The next support level stands at $67.50, with a break below potentially opening the door to $65.00. However, any signs of stronger global demand or supply disruptions could offer a temporary reprieve.
Investors will be closely monitoring global economic data and geopolitical developments for further cues on OPEC’s production policy and the broader demand outlook.
