Oil prices fall on the expected rise in production following the agreement of OPEC

SINGAPORE (Reuters) – The price of a barrel of Brent fell by more than 1.5% on Monday as traders take into account an increase in output expected Friday in Vienna at the headquarters of the Organization of Petroleum Exporting Countries ( OPEC).

The Brent LCoC1 crude oil futures contract, the international benchmark for oil prices, stood at $ 74.21 per barrel at 0343 GMT, down 1.8% from the previous close.

West Texas Intermediate (WTI) CLc1 crude oil futures were $ 68.40 a barrel, down 0.3%, more than Brent's slightly lower drilling activity in the first quarter. United States.

Prices first jumped after the announcement of the transaction at the end of last week because we did not see it increase the supply as much as some had planned.

OPEC member countries and non-OPEC countries, including Russia, have reduced their production by 1.8 million barrels per day (bpd) since 2017 to tighten the market and support the prices.

Largely because of unforeseen disruptions in places like Venezuela and Angola, the group's output has been lower than targeted reductions, which it says will be offset by increases in supply, including from OPEC in Saudi Arabia. Although analysts warn that there is little space capacity for large-scale production increases.

"Several ministers have suggested that (increase) would correspond to an increase in production of 0.7 million bpd," said US bank Goldman Sachs after the announcement of the agreement, adding that "the production Iranian might even be lower than we assume. " and that its production could further decline due to impending US sanctions.

Nevertheless, the British bank Barclays said that the OPEC and Russia commitments would "bring the market a deficit of -0.2 million bpd in the second half of 2018 to a surplus of 0.2 million bpd.

Wood Mackenzie Energy Council said the deal "represents a compromise between the response to consumer pressure and the need for oil producing countries to maintain oil prices and not to harm their economies."

In the United States, US energy companies first cut an oil rig last week, the first reduction in 12 weeks, bringing the total number of platforms to 862, Baker Hughes (GE.N) said Friday.

This allowed the platform to track its weakest monthly gain since it dropped from two platforms in March with only three platforms added in June, although the overall level remains at a lower level. at the March 2015 summit of the previous week.