Oil prices fell on Monday after OPEC+ agreed to further increase its output targets from August while exports from key producers via the Strait of Hormuz are recovering, potentially adding to global supplies, Reuters reported.
Brent crude futures fell 41 cents, or 0.57%, to $71.71 a barrel at 0942 GMT after settling 0.45% higher on Friday. U.S. West Texas Intermediate crude was at $68.32 a barrel, down 37 cents, or 0.54%. There was no settlement for WTI on Friday as U.S. markets were closed ahead of the Independence Day holiday on Saturday.
Both contracts were little changed last week after mostly falling over the past few weeks, as investors kept a close eye on talks between the U.S. and Iran over the fate of shipping through the Strait of Hormuz while keeping tabs on the recovery in Gulf oil exports.
The Organization of the Petroleum Exporting Countries and their allies including Russia agreed on Sunday to further increase output targets by 188,000 barrels per day from August, on top of similar increases for June and July.
However, the increase has remained largely on paper because of the U.S.-Israeli war on Iran, which closed the strait to tanker traffic for key OPEC producers, including Saudi Arabia, Kuwait and Iraq, capping their output.
"They are selling into a falling market, offering little hope of an imminent price recovery," said PVM analyst Tamas Varga. "However, lower oil prices will undoubtedly stimulate demand further down the line."
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