Brent crude is down $ 1.08 or 1.5%
Oil prices fell more than $ 1 a barrel on Monday after OPEC + group of producers agreed to overcome internal divisions and boost production, sparking some concerns about crude surpluses as covid-19 infections continue to rise in many countries.
After falling nearly 3% last week, Brent crude was at $ 1.08 or 1.5% a barrel at $ 72.51 within 0220 GMT. U.S. oil was up 1.01 cents, or 1.4%, at $ 70.80 a barrel, down nearly 4% last week.
As the global economy recovers from the COVID-19 epidemic, OPEC + ministers agreed earlier this month to increase oil supplies to a maximum of about 2-1 / 2 years from August.
The group, which includes allies such as the Organization of the Petroleum Exporting Countries (OPEC) and Russia, has agreed to new production shares from May 2022.
“Oil prices are likely to continue to jig in the coming weeks,” Goldman Sachs said after the deal.
However, he said the agreement was in line with the US investment bank’s view of oil, which is positive, and that manufacturers should “focus on maintaining a tight p market to guide higher futures and prevent competitive investment”.
It said the OPEC + deal was “upside-down” to the summer forecast that Brent would reach $ 80 a barrel and $ 5 a barrel, in its view to the international standard that a barrel would average $ 75 next year.
To overcome internal divisions, OPEC + has agreed to new production quotas for several members, including the United Arab Emirates, Saudi Arabia, Russia, Kuwait, and Iraq.
“The agreement should reassure market participants that it will not lead to a chaotic breakdown and that production will not open floodgates at any time,” RPC Capital Markets said in a statement.
The group cut production last year by 10 million barrels per day (BPD), as the epidemic escalated and US oil prices plummeted to negative territory at one point.
It has gradually brought back some distribution, with a reduction of about 5.8 million BPD.