The Organization of the Petroleum Exporting Countries (OPEC) and its allies, finally reached an agreement on Sunday to increase crude oil production, thus resolving disputes faced earlier this month.
The group, which also consists of allies such as Russia, and also known as OPEC+ has agreed to increase production by 400,000 barrels a day per month starting in August until December 2021.
With the deal, it gives a positive outlook for the oil market where the group will restore production of the 5.8 million barrels a day it still holds, by completely halting the cuts around September 2022.
The deal also gives Saudi Arabia, the United Arab Emirates (UAE), Iraq, Kuwait and Russia, higher production benchmarks.
For Russia and Saudi Arabia, the base level will increase by 0.5 million barrels per day to 11.5 million barrels, while the UAE will increase its production from 3.17 million to 3.5 million barrels per day.
Following the deal, oil prices fell more than $ 1 a barrel in the Asian session, causing Brent crude futures to slump lower to $ 72.51 a barrel, after declining nearly 3% last week.
Meanwhile, U.S. WTI crude futures also slipped lower to $ 70.80 a barrel, extending a nearly 4% decline last week.
Meanwhile, risky sentiment in the market due to the increasingly worrying development of Covid-19 around the world also put pressure on the crude oil market.
