Oil Prices Surge as OPEC+ Announces Limited June Output Hike

Oil prices rallied sharply in midday trading Monday, with both major benchmarks posting significant gains. West Texas Intermediate (WTI) crude rose $3.43 to $105.37 per barrel, a 3.36% increase. Brent crude climbed $5.73 to $113.90, a jump of 5.3%. Natural gas also gained, rising $0.08 to $2.86 per MMBtu. The discount for Bakken crude at the wellhead narrowed slightly, trading at $3.42 below WTI.

The price surge follows a weekend announcement from a core group of OPEC+ nations to incrementally increase production. According to a statement posted on OPEC’s website, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman decided in a May 3 virtual meeting to boost output by 188,000 barrels per day in June. The increase is a partial rollback of earlier voluntary cuts. The largest contributions come from Saudi Arabia and Russia, each adding 62,000 barrels per day.

The decision comes against a backdrop of robust global oil demand. OPEC's latest Annual Statistical Bulletin, released recently, projected that world oil demand grew by 1.30 million barrels per day year-on-year in 2025, reaching 105.15 million barrels per day. The report noted the largest demand gains were in non-OECD Asia, China, Africa, Latin America, India, and the Middle East.

For Bakken operators, the sustained high price environment above $100 per barrel for WTI, coupled with a relatively narrow local differential, signals strong netback revenues. The price strength is being driven by solid demand fundamentals and a cautious, measured supply response from major producers. The OPEC+ group emphasized a "cautious approach" and retained "full flexibility to increase, pause or reverse" production adjustments based on market conditions.

The market is also digesting the recent exit of the United Arab Emirates from OPEC and OPEC+, effective May 1, as noted in both OPEC releases. Meanwhile, corporate earnings reflect the positive price impact. Seplat Energy PLC raised its Q1 dividend by 96% year-on-year, with its CEO citing a dramatically changed outlook due to conflict in the Middle East and the company's exposure to higher oil prices, according to a Rigzone report.

The combination of firm demand, disciplined supplier management, and geopolitical uncertainty continues to underpin a strong crude market. For producers in the Williston Basin, the current pricing provides favorable economics for continued production and potential capital investment, though market volatility remains a constant factor.