Oil prices fell on Thursday after OPEC+ agreed to lessen output cuts from August, though the decline was dampened by a recovery in demand as U.S. crude stocks had an unprecedented drop.
Brent crude slid 0.3%, or 13 cents, at $43.66 per barrel. U.S. West Texas Intermediate crude fell 0.4%, or 18 cents, at $41.02 per barrel. Both benchmarks gained 0.2% in the previous session, lifted by a drop in U.S. crude stockpiles.
OPEC and its allies including Russia agreed to ease output cuts from August as the global economy recovers from the coronavirus pandemic. OPEC will taper its record supply cut to 7.7 million bpd until December.
Despite the official OPEC+ accord, Saudi Arabia’s Energy Minister said that output cuts from August to September would amount to 8.1 million to 8.3 million bpd. This is due to the compensation of several countries that did not commit to the previously agreed supply cuts.
Still, oil prices are expected to remain steady as a rise in crude processed by refineries is likely to offset high supply volumes.