OPEC and its allies will withdraw production cuts in August. Oil prices fell on Monday due to excessive supply concerns, as the increase in COVID-19 cases worldwide marked slower aggregation of demand.
Brent crude futures slid 27 cents, or 0.6%, to $43.25 a barrel by 0642 GMT. West Texas Intermediate (WTI) crude futures were down 34 cents, or 0.8%, at $39.93.
Brent recorded gains in July for the fourth month, and US crude oil for the third consecutive month. Both rose from the depths in April, when most of the world fell due to deadlocks due to coronavirus pandemics.
OPEC + will begin to cut production cuts this month, and the possibility of a lower level of recovery in oil prices worry the industry, due to excessive supply. Also, fear of resurgence of coronavirus cases is putting pressure on oil markets.
The group of allies, including OPEC + and Russia, will speed up production in August and increase around 1.5 million bpd barrels per day for global supply.
Although the COVID-19 wave slows the recovery rate in demand, the gradual easing of coronavirus-induced restrictions will continue slowly as it increases demand and oil prices.
Australia’s Victoria state declared a “state of emergency” on Sunday, while officials in the Philippines said they will implement new restrictions in Manila this week reflecting global concerns about controlling the pandemic.