Due to uncertainties about OPEC+’s intention to expand production into a global market with weak demand, oil prices fell more than $1 on Tuesday.
Brent crude futures fell $1.13, or 1.4%, to $77.23 a barrel at 1210 GMT, continuing their losses from a four-month low. Brent slid more than 3% on Monday, closing below $80 for the first time since February 7.
Brent’s low on Tuesday was $76.76, less than $2 below this year’s low of $74.79 in January.
US crude futures slid $1.21, or 1.6%, to $73.01. WTI fell 3.6% Monday, nearing a four-month low.
The Organization of the Petroleum Exporting Countries (OPEC+) and its allies under Russia agreed on Sunday to extend most oil output reductions until 2025 and gradually unwind eight members’ voluntary reductions starting in October.
Oil dealer Tamas Varga of PVM says the market response depresses oil producers and makes consumers happy.
Negative signs from major economies including the U.S., China, and Europe show their oil appetite may not be as healthy as planned for the rest of the year. The expected October adds oversupply concerns to traders’ concerns about rising interest rates hurting global economic growth.
Non-OPEC countries like the US are also increasing supplies.
“The ‘bad news is bad news’ mantra may lead to lower oil prices, potentially retesting the lower end of its month-long range at $72,” IG market strategist Yeap Jun Rong wrote in an email.
The US government will provide inventory and supplier statistics on Wednesday.
The product, which represents demand, will show how much gasoline was consumed over Memorial Day weekend, which kicks off the US driving season.
Commerzbank analyst Carsten Fritsch said, “It will be important to see how the demand for oil develops in the upcoming quarters.”
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