WTI Crude Oil price surges on cautious OPEC+ supply stance

• WTI crude climbs above $62 as OPEC+ signals no immediate change to current production policy.
• Oil prices rise on expectations that supply increases will remain limited in the near term.
• OPEC+ core eight meet Saturday to decide on a proposed 411,000/bpd production hike for July.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) convened at its Vienna headquarters on Wednesday to assess the current state of the oil market. 

While no immediate changes to production policy were announced, the meeting laid the groundwork for continued discussions on 2027 production baselines and the potential for future output adjustments in the months ahead. 

At the time of writing, WTI Crude oil is trading above $62, gaining more than 1.50% on the day as markets respond to the group's cautious stance. 

A key backdrop to Wednesday's meeting was the evolving trajectory of global oil demand, particularly within non-OECD economies. According to OPEC's latest outlook, annual demand growth is expected to slow through 2029, with China's contribution declining sharply after 2023. In contrast, "Other non-OECD" economies are projected to drive the majority of demand growth beyond 2025, even as total volumes begin to moderate.

*Non-OECD refers to countries that are not members of the Organisation for Economic Co-operation and Development (OECD). These are typically emerging and developing economies, in contrast to the OECD's mostly advanced, high-income nations.*

Source: OPEC

This demand landscape directly informed OPEC+'s cautious approach to future output planning. 

It also underscored the urgency behind ongoing talks to revise 2027 production baselines as countries like the UAE and Iraq seek higher quotas aligned with their growing capacity to serve emerging markets. 

With demand patterns shifting and long-term growth slowing, the alliance is under increasing pressure to balance supply discipline with internal quota reform, making the outcome of these baseline negotiations pivotal to OPEC+'s long-term strategy.

On Saturday, a separate meeting will be held via videoconference between the OPEC+ core eight key producers. Members include Saudi Arabia, Russia, the United Arab Emirates (UAE), Kuwait, Iraq, Algeria, Oman, and Kazakhstan.

The primary objective of this gathering is to decide on a proposed 411,000 barrels-per-day (bpd) increase in oil production for July, following similar adjustments in May and June. 

This decision will be closely watched by markets since it underscores OPEC+'s ongoing efforts to align supply with evolving global demand conditions and maintain price stability.