Due to increased OPEC production and Covid concerns, U.S. oil prices fell 5% to below $70

West Texas Intermediate Crude Oil Futures As OPEC and its allies agreed to increase production and the delta Covid variant threatened global demand, oil prices fell below the critical $70 level for the first time in more than a month on Monday.

US oil fell more than 5%, hitting an intraday low of $67.84. The contract is now nearly 12% below the recent high of $76.98 set on July 6, which is the highest level in more than six years.International benchmark Brent crude oil It fell 4.8% to US$70.10 per barrel.

The Group of 23, or OPEC+, Agree to sunday Starting in August, the monthly output will increase by 400,000 barrels. The increase in production will continue until September 2022, when the nearly 6 million barrels of crude oil still detained by the group every day will all be put on the market again.

As Saudi Arabia and the United Arab Emirates disagree on the latter’s benchmark production quota, the group announced the news after the breakdown of its first meeting on July 1.

“We believe [Sunday’s] Goldman Sachs stated in a report to clients that the transaction supports our constructive oil price view, that supply is increasingly becoming a source of bullish impulse and shows evidence of non-OPEC supply shortages in the coming months. The company pointed out that U.S. disciplined producers provided a lower limit for oil prices, although it pointed out that delta variants may cause price volatility in the coming weeks.

The OPEC+ meeting in July did not reach an agreement, causing the oil market to fall into turmoil because it opened the door to the organization’s possible dissolution, and each country pursues independent production policies.

“This is an update of OPEC + Oath,” Royal Bank of Canada’s Helimacroft on CNBC on Monday”Global exchange“We think the market can definitely absorb an additional 400,000 barrels of oil per month… This is a constructive agreement. “