Oil declines as uncertainty persists over OPEC+ cuts

Oil futures reversed course after briefly rising on Monday amid continued pressure from the OPEC+ decision and uncertainty over global fuel demand growth, but risks of supply disruptions due to conflict in the Middle East limited losses.

By 0406 GMT, Brent crude futures fell 49 cents, equivalent to 0.4 percent, to $78.39 per barrel, while US West Texas Intermediate crude futures reached $73.65 per barrel. Low 42 cents, or 0.6 percent.

Oil prices fell more than two percent last week due to investor doubts about the extent of supply cuts implemented by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, within the framework of the OPEC+ group, and concerns about the slowdown in global manufacturing activity.

The OPEC+ cuts announced on Thursday were voluntary in nature, raising doubts about whether producers would implement them in full. Investors are also unsure how to measure these cuts.

Geopolitical considerations were also at the forefront of investors’ concerns with the resumption of fighting in Gaza. The US military said on Sunday that three commercial ships were attacked in international waters in the southern Red Sea, while the Yemeni Houthi group claimed responsibility for drone and missile attacks on two Israeli ships in the region.

Tina Teng, an analyst at CMC Markets, said that the resumption of the war between Israel and the Palestinian Islamic Resistance Movement (Hamas) fueled the momentum for the rise in oil prices.