SINGAPORE (Reuters) – Brent crude prices fell more than 1.5 percent on Monday as traders took into account an expected increase in the product agreed at the headquarters of the Organization of the Petroleum Exporting Countries ( OPEC) in Vienna on Friday.
Despite this, analysts said that the world oil markets are likely to remain relatively tight this year.
Brent LCOc1 crude futures, the international reference point for oil prices, were at $ 74.27 per barrel at 0402 GMT, down 1.7 percent since its last close.
U.S. Crude oil futures West Texas Intermediate (WTI) CLc1 were at $ 68.41 per barrel, down 0.25 percent, supported more than Brent by a slight fall in US drilling activity. UU And an interruption in the Canadian supply.
Prices initially rose after the OPEC agreement was announced late last week, as the supply was not seen to increase as some expected.
The partners of OPEC and other countries, including Russia, since 2017 have reduced production by 1.8 million barrels per day (bpd) to adjust the market and maintain prices.
Largely due to unplanned disruptions in places like Venezuela and Angola, the group's production has been below expected cuts, which it says will be reversed by the increase in supply, especially from the OPEC leader, Saudi Arabia. Although analysts warn that there is little space capacity for large-scale production increases.
"The OPEC + press conference on Saturday provided more clarity on the decision to increase production, with guidance for a full increase of 1 million bpd in 2H18," Goldman Sachs said in a note on Sunday.
"This is a bigger increase than the one presented on Friday, although the objective is still to stabilize the inventories, not generate a surplus," added the US bank. UU
The British bank Barclays said that OPEC and Russia's commitments would take "the market from a deficit of -0.2 million bpd in H2 2018 to a surplus of 0.2 million bpd."
Energy consultancy Wood Mackenzie said the agreement "represents a compromise between responding to consumer pressure and the need for oil-producing countries to maintain oil prices and avoid damaging their economies."
In the United States, US energy companies cut an oil rig last week, the first reduction in 12 weeks, bringing the total platform count down to 862, Baker Hughes said on Friday ( GE.N ).
That put the platform on track for its smallest monthly gain since the decline in two platforms in March, with only three platforms added so far in June. However, the general level is still only one less than the March 2015 maximum of the previous week.
Goldman Sachs also warned that a "cut in the oil sands facilities of Syncrude Canada could leave North America below 360,000 bpd of supply throughout July."
He added that this "will exacerbate the current global deficit, making the increase in OPEC production even more necessary."
Reports of Henning Gloystein; Edition by Joseph Radford and Christian Schmollinger