Crude oil prices dropped after Saudi Arabia and Russia said they would increase production by Organization of Petroleum Exporting Countries (OPEC) and allied nation. The increase in production would be larger than what some members of the coalition estimated.
Brent futures decreased by as much as 2.4% in London on Monday. Oil chiefs from Saudi Arabia and Russia indicated that it would add 1 million barrels to daily supplies, more than the 700,000-barrel figure initially expected by several stakeholders and cartel members.
Meanwhile, near-term U.S. crude futures bounced higher after an outage at a Canadian oil-sands facility threatened shipments to American refineries.
Brent futures for August settlement slipped to $74.03 dropping by $1.52 a barrel as at 10:23 a.m. New York time on the Intercontinental Exchange (ICE) Futures Europe exchange. In contrast, West Texas Intermediate (WTI) crude for August delivery added 28 cents to $68.86 on the New York Mercantile Exchange. Total volume traded was about 53 percent above the 100-day average.
As a result of the bump in WTI’s price, Brent’s premium to the U.S. benchmark for the same month shrank to $5.34 a barrel from more than $10 last week.
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