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Oil falls more than 1% after OPEC + agrees to increase supply By Reuters

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© Reuters. FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin in Menton, Loving County, Texas, US November 22, 2019. REUTERS / Angus Mordant / Photo File

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices fell more than 1% on Monday, hit by an agreement over the weekend in the OPEC + group of producers to boost production after a previous deal fell due to objections from the Emirates United Arab Emirates (UAE).

it was down $ 1, or 1.4%, to $ 72.59 a barrel from 0037 GMT, after falling nearly 3% last week. U.S. oil fell 94 cents, or 1.3 percent, to $ 70.87 a barrel, after falling nearly 4 percent last week.

OPEC + ministers on Sunday agreed to increase oil supply from August to lower prices that at the beginning of this month have risen to their highest in about two and a half years as the global economy picks up the COVID-19 pandemic.

The group, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, collectively known as OPEC +, have agreed new production actions by May 2022.

“This agreement should give market participants a comfort that the group is not headed for a disorderly breakdown and will not open production doors anytime soon,” RBC Capital Markets said in a note.

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OPEC + has agreed to new production quotas for other members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq.

Last year, the group cut production by a record 10 million barrels per day (bpd) amid an evaporation of demand that the pandemic has developed, causing a collapse in prices with U.S. oil to a point that fell into negative territory.

It brought in a little bit of supply, leaving it with a reduction of about 5.8 million bpd.

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