Oil prices collapse after OPEC + reaches deal to ease cuts – .

Oil prices collapse after OPEC + reaches deal to ease cuts – .

Oil prices fell nearly 4% early Monday, with WTI crude slipping an eyelash above $ 69 a barrel, after OPEC + ruled on Sunday it would start releasing 400,000 barrels a day (bpd) in the market every month from August until it takes place. all cuts 5.8 million bpd.

The prospect of monthly increases in the OPEC + alliance’s oil supply comes as COVID infections rise in many countries due to the faster-spreading Delta variant. Concerns about a possible setback in the recovery of global oil demand amid rising supply from OPEC and its Russian-led non-OPEC partners pushed oil prices lower on Monday.

As of 8:22 a.m. EDT, WTI crude prices were trading down 3.9% to $ 69.01 and Brent crude was down 3.52% to $ 71.00.

The fact that OPEC + reached an agreement on production and reference production levels raised major uncertainty in the market, some of which feared a breakdown of the alliance.

The deal is constructive for the market, Helima Croft, head of global commodities strategy at RBC Capital Markets, told CNBC, noting that “This deal should reassure market participants that the group is not heading. towards a disorderly dissolution and will not open. production is going out soon.

Despite the fact that OPEC + will add more and more supply in each of the coming months, many analysts continue to believe that the market will remain relatively tight as demand continues to grow.

ING, for example, has kept its oil price forecast of $ 75 a barrel for Brent Crude in the third quarter of this year, as OPEC + supply additions are in line with the bank’s earlier projections.

“Healthy growth in demand combined with moderate increases in supply from OPEC + will likely remain favorable to the oil market in the near term at least,” ING strategists Warren Patterson and Wenyu Yao said Monday morning.

Goldman Sachs continues to be bullish on oil and even considers the OPEC + deal to be up $ 2 a barrel from its outlook of $ 80 a barrel for Brent this summer.

By Tsvetana Paraskova for OilUSD

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