Oil prices fell on Monday as major oil producers of OPEC finally agreed on their production policy, prompting concerns about oversupply while rising COVID Delta cases keeps dampening hopes for a full economic recovery.
International benchmark Brent crude was trading at $72.86 per barrel at 0637 GMT for a 0.99% loss after closing Friday at $73.59 a barrel.
American benchmark West Texas Intermediate (WTI) was trading at $70.78 a barrel at the same time with a 1.09% decrease after ending the previous session at $71.56 per barrel.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC , held the 19th Ministerial Meeting on Sunday after United Arab Emirates (UAE) refused new production rises based on “outdated output baselines.”
The talks stalled for two weeks and finally the group announced its resolution which includes updates to not only production baseline of UAE but also of Saudi Arabia, Russia, Iraq and Kuwait.
In line with the new agreement, the UAE’s baseline will be increased from 3.168 million to 3.5 million, Iraq’s from 4.653 to 4.803 million, and Saudi Arabia and Russia's from 11 million to 11.5 million.
The group also increased the output by 400,000 barrels per day (bpd) from August to December and extended its production cut agreement from April 2022 to December 2022.
Rising case numbers of COVID-19 Delta version particularly in Europe and Asia is also raising fears about the possibility of new mitigation measures in many countries.
A total of 12,500 new COVID cases has been detected in the last 24 hours, according to the French public health authority.
To combat a rebound in COVID-19 infections, the country also announced tightened restrictions on unvaccinated visitors from a number of countries including the UK, Spain, Portugal, while welcoming those who have received both vaccine shots, Prime Minister Jean Castex announced on Saturday.