Brent oil prices drop by 2 percent as traders expect output rise after OPEC deal

Brent oil prices drop by 2 percent as traders expect output rise after OPEC deal

SINGAPORE (Reuters) – Brent crude oil prices fell by greater than 2 percent early on Monday as traders factored in an anticipated output improve that was agreed on the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on Friday.

FILE PHOTO: An oil pumpjack is seen in Velma, Oklahoma U.S. April 7, 2016. REUTERS/Luc Cohen

Brent crude futures LCOc1, the worldwide benchmark for oil prices, had been at $73.90 per barrel at 0035 GMT, down 2.2 percent from their final shut.

U.S. West Texas Intermediate (WTI) crude futures CLc1 had been at $68.36 a barrel, down zero.three percent, supported by a slight drop in U.S. drilling exercise.

Prices initially jumped after the deal was introduced as it was not seen boosting provide by as a lot as some had anticipated.

OPEC and non-OPEC companions together with Russia have since 2017 lower output by 1.eight million barrels per day (bpd) to tighten the market and prop up prices.

Largely due to unplanned disruptions in locations like Venezuela and Angola, the group’s output has been beneath the focused cuts, which it now says might be reversed by provide rises particularly from OPEC chief Saudi Arabia.

Britain’s Barclays financial institution mentioned OPEC’s and Russia’s commitments would take “the market from a -0.2 million bpd deficit in H2 2018 to a 0.2 million bpd surplus”.

Energy consultancy Wood Mackenzie mentioned the settlement “represents a compromise between responding to consumer pressure and the need for oil-producing countries to maintain oil prices and prevent harming their economies”.

In the United States, U.S. power firms final week lower one oil rig, the primary discount in 12 weeks, taking the whole rig depend to 862, Baker Hughes (GE.N) mentioned on Friday.

That put the rig depend on monitor for its smallest month-to-month achieve since declining by two rigs in March with simply three rigs added to date in June, though the general degree stays only one rig wanting the March 2015 excessive from the earlier week.

Reporting by Henning Gloystein; Editing by Joseph Radford

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