Ripples Advisory, Oil falls after Opec's plan to raise output, but markets to remain tight
Opec and non-Opec partners including Russia have since 2017 cut output by 1.8 million barrels per day (bpd) to tighten the market and prop up prices
Brent crude oil prices fell over 1.5 per cent on Monday as traders factored in an expected output increase that was agreed at the headquarters of the Organization of the Petroleum Exporting Countries (Opec) in Vienna on Friday.
Despite this, analysts said global oil markets would likely remain relatively tight this year.
Brent crude futures, the international benchmark for oil prices, were at $74.27 per barrel at 0402 GMT, down 1.7 per cent from their last close.
US West Texas Intermediate (WTI) crude futures were at $68.41 a barrel, down 0.25 per cent, supported more than Brent by a slight drop in US drilling activity and a Canadian supply outage.
Prices initially jumped after the Opec deal was announced late last week as it was not seen boosting supply by as much as some had expected.
Opec and non-Opec partners including Russia have since 2017 cut output by 1.8 million barrels per day (bpd) to tighten the market and prop up prices.
Largely because of unplanned disruptions in places like Venezuela and Angola, the group's output has been below the targeted cuts, which it now says will be reversed by supply rises, especially from Opec leader Saudi Arabia. Although analysts warn there is little space capacity for large-scale output increases.
"Saturday's Opec+ press conference provided more clarity on the decision to increase production, with guidance for a full 1 million bpd ramp-up in 2H18," Goldman Sachs said in a note on Sunday.
"This is a larger increase than presented Friday although the goal remains to stabilize inventories, not generate a surplus," the US bank added.
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