Oil prices extended their decline with the opening of the American market on Monday, to continue its losses for the fourth consecutive day, recording the lowest level in six weeks, with American crude trading below $ 70 a barrel and Brent crude below $ 71, after the “OPEC Plus” alliance officially agreed to increase production at the beginning From next August, which renewed fears of oversupply in the markets, especially after the acceleration of oil production in the United States.
US crude fell 3.4% to $68.99, the lowest since June 10, from the opening level at $71.43, and recorded the highest level at $71.66, and Brent crude fell 2.6% to $70.92 a barrel, the lowest since June 10. Last, from the opening level at $72.81, and recorded the highest level at $73.32.
When prices were settled on Friday, US crude lost 0.1%, and Brent crude fell 0.3%, in the third consecutive daily loss, after the Saudi-Emirati dispute over the production policy of the OPEC Plus alliance was resolved.
On the level of trading last week, international oil prices fell by an average of 3.75%, in the second consecutive weekly loss, due to renewed concerns about the balance between supply and demand in the market.
The “OPEC Plus” alliance announced, after an emergency meeting on Sunday, to increase production by 400,000 barrels per day, starting from next August, with the extension of the expiration date of the cuts until the end of 2022 instead of April 2022.
During the meeting, it was decided to raise the baseline for the production of the OPEC Plus alliance from 43.8 million barrels per day to 45.5 million barrels per day as of May 2022, with the amendment of the baseline of UAE production to 3.5 million barrels instead of 3.8 million barrels per day, while raising the baseline for production by Saudi Arabia and Russia By 500,000 barrels each, from the level of 11 to 11.5 million barrels per day, as of May 2022.
The current reductions of the OPEC Plus alliance are approximately 6 million barrels per day, which was scheduled to end in April 2022, and after the new agreement, the reductions will be reduced to 5.6 million barrels per day to be implemented until the end of 2022, with the agreement reviewed monthly with the aim of dealing with new developments in the market.
On the other hand, US crude production increased by about 300,000 barrels per day over the past two weeks, rising to 11.4 million barrels per day in the week ending July 9, the highest level since May 2020, according to government data.