Oil drops as OPEC+ agreement raises prospect of more supply | Reuters

Oil drops as OPEC+ agreement raises prospect of more supply | Reuters

Oil prices recouped some losses on Monday, but were still down after OPEC+ overcame internal divisions and agreed to boost output, which sparked concerns about a crude surplus as COVID-19 infections continue to rise in many countries.

Brent crude was down 61 cents, or 0.8%, at $72.98 a barrel by 0617 GMT, after falling to $72.35 earlier in the session. U.S. oil was down 66 cents, or 0.9%, at $71.15 a barrel, having slipped to $70.64 earlier.

OPEC+ ministers agreed on Sunday to increase oil supply from August to cool prices that earlier this month climbed to the highest in around 2-1/2 years as the global economy recovers from the COVID-19 pandemic.

The group, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, agreed new production shares from May 2022.

“Oil prices may continue to gyrate in the coming weeks,” Goldman Sachs said after the agreement.