According to a report released by CNBC on Monday, the oil prices dropped more than 2% on Monday after OPEC and its allies reached a deal to cut the oil production.
- Brent crude futures dropped 2.13% to $72.02 per barrel, as U.S. crude futures dropped 2.09% to $70.31 per barrel.
- Negotiations to expand production had initially stalled after UAE rejected the proposals for reintroducing the oil cuts.
- Helima Croft RBC Capital Markets stated that the agreement gives investors and analysts comfort OPEC+ is not ended for a messy breakup and is unlikely to open production floodgates.
- In 2020, OPEC and its allies agreed to limit output by close to 10 million barrels per day from May 2020 to April 2022.
- The oil production cut deal presents a buying opportunity for investors in the next six months as global inventories continue to decline.
OPEC+ is restoring oil production slower than the growing demand for oil to support future prices.
USOIL down -3.02%, EUR USD slips -0.27%.