What moves oil prices: OPEC+, inventories, the futures curve and the dollar

Crude oil is traded through futures, options, exchange-traded funds and, for many retail traders, CFDs. Its price is set, in the words of the US Energy Information Administration (EIA), by something close to a global auction, where thousands of transactions happen at once all along the supply chain. Several forces act on that auction, and they rarely all push the same way.

This article explains those forces and how traders follow them. It does not forecast where oil prices are going.

Brent and WTI: two benchmarks, two contracts

Most headline oil prices refer to one of two benchmarks. Brent is the international marker. The ICE Brent Crude futures contract trades in lots of 1,000 barrels. It can be delivered by exchange for physical, or cash-settled against the ICE Brent Index, and each month’s contract stops trading on the last business day of the second month before the delivery month.

West Texas Intermediate (WTI) is the main North American benchmark, traded on the New York Mercantile Exchange (NYMEX) in contracts of 1,000 barrels. Contracts held to expiry are settled by physical delivery at storage facilities in Cushing, Oklahoma. According to the EIA, only about 1% of futures traded go to delivery, as most traders close or roll their positions first.

That delivery point matters. On 20 April 2020, with demand collapsing and storage at Cushing scarce, the expiring WTI contract traded as low as -$40.32 a barrel. The EIA said the move was driven largely by the timing of that contract’s expiry, while longer-dated WTI contracts and the Brent contract stayed positive. It is an extreme example of how a local storage problem can move a benchmark price.

OPEC+ supply decisions

The Organization of the Petroleum Exporting Countries (OPEC) produces about 35% of the world’s crude oil, according to the EIA. OPEC+ is the wider coalition of OPEC members and other exporters, the largest of which is Russia. The group sets production targets, and the EIA notes that prices have historically tended to rise when those targets are cut. Members do not always stick to their targets, however, and the market weighs what they actually produce as well as what they announce.

Spare capacity is just as closely watched. The EIA defines it as production that can be brought online within 30 days and sustained for at least 90 days. OPEC members hold almost all of the world’s spare capacity. When it is plentiful, a supply disruption elsewhere can be offset. When it is low, prices tend to carry a larger risk premium.

The OPEC+ countries that announced additional voluntary production adjustments in 2023 now meet monthly. On 2 August 2026, seven of them (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman) agreed to implement a production adjustment of 188,000 barrels a day in September, drawn from the additional voluntary adjustments announced in April 2023. On 6 September they kept October’s required production at September’s level and set their next meeting for 4 October.

Inventories and the weekly EIA report

The EIA describes stored oil as the balancing point between supply and demand. When production exceeds consumption, stocks build. When consumption runs ahead, they are drawn down. Because some products are seasonal, the EIA says inventories are best compared with the same period in earlier years.

The most closely watched figures for US stocks are in the EIA’s Weekly Petroleum Status Report. Its summary tables are released after 10:30am Eastern time on Wednesdays, with a one-day delay in some holiday weeks. Data for many other countries arrives less promptly, or not at all, which the EIA says adds uncertainty to prices.

Stocks are currently central to the market. In its September 2026 Oil Market Report, the International Energy Agency (IEA) said global observed inventories had fallen by 507 million barrels since the start of the war in the Middle East, including 95 million barrels in August alone. The EIA’s September Short-Term Energy Outlook estimated global inventories had fallen by 400 million barrels so far this year. The figures come from separate estimates covering different periods, so they do not match.

Demand

On the demand side, the EIA identifies economic growth as one of the biggest influences, because transport depends almost entirely on petroleum products. Oil products make up about a third of world energy consumption. Demand can also fall when prices rise far enough. The IEA’s September report expects world oil demand to decline by 2.5 million barrels a day in 2026, citing lost supplies of refined products and higher fuel prices.

The futures curve: contango and backwardation

Oil futures are listed for many months ahead, and the relationship between near and distant prices is known as the curve. The CFTC defines contango as later delivery months trading progressively higher than the nearest month, and backwardation as the opposite.

The EIA links the shape of the curve to inventories. When futures prices rise relative to spot, holding oil in storage to sell later becomes more attractive, and stocks build. When a sudden loss of supply lifts spot prices above futures, stocks are drawn down to meet immediate demand. The IEA’s September report said backwardation had reached “extreme levels” as crude markets tightened.

The dollar

Crude oil is priced and traded mainly in US dollars. The EIA says the dollar and oil prices have tended to move in opposite directions over recent decades. A weaker dollar makes oil cheaper for buyers using other currencies, and producers outside the US may look for higher dollar prices to protect their revenues. It adds that the growth of US shale production has complicated the link, and the two have occasionally moved together.

Geopolitics, weather and risk premiums

The EIA points to past price shocks that coincided with political events, from the Arab oil embargo of 1973-74 to the 1990 Gulf War. When traders fear a disruption and spare capacity and stocks look thin, prices can include a risk premium above what current supply and demand alone would justify. Hurricanes, refinery outages and pipeline problems can have similar effects, though the EIA says these tend to be short-lived.

The current market shows the effect. The IEA said more than 10 million barrels a day of Gulf output remained shut in during August. It put ICE Brent futures at $105 a barrel at the time of writing, 45% above pre-war levels.

How futures and CFD traders see it

Futures traders deal with each of these forces through specific contracts. They need to track expiry dates, roll positions before delivery and watch the spread between months. The CFTC’s weekly Commitments of Traders report, based on Tuesday’s positions and usually released on Friday, shows how different types of traders are positioned. The EIA notes that some people believe heavy investor trading has significantly affected how prices are set, but that experts have not definitively proven it.

A CFD trader is exposed to the same forces through the provider’s price. It is worth checking which contract a CFD tracks and whether it is adjusted when that contract rolls. Positions held overnight carry financing costs, covered in our guide to swap rates and overnight financing. The EIA’s own explainer on oil prices is available in our republished edition.

Contract design is also changing. In June 2026 the CFTC asked for public comment on perpetual contracts referencing energy commodities such as crude oil.

Reading the drivers together

No single number explains oil. A useful routine is to note OPEC+ meeting dates, read the Wednesday EIA data against seasonal norms, watch whether the curve is in contango or backwardation, and keep an eye on the dollar. As with any market, the aim is to understand why prices moved, not to predict the next move.