Brent Finishes Lower Amid Lower Prices and OPEC Move

Oil prices declined on Monday, with markets digesting the recent decision by the OPEC+ plus, following disruptions in North American due to Hurricane Ida and concerns over the pandemic.

Brent Crude futures for November delivery closed down by 39 cents or 0.54% at $72.22 per barrel.

This is the second consecutive decline for the global benchmark, while the U.S. WTI crude futures were not traded with the NYMEX exchange closed due to the Labor Day federal holiday.

In addition, major producers are cutting their official selling prices (OSP) to lure higher demand, especially from Asian markets.

Last week, the OPEC+ alliance decided to maintain the gradual production increases, easing previous output cuts.

OPEC’s monthly report for August showed that the growth in the global demand for oil is estimated at six million barrels per day this year, maintaining the same expectations of July.

This year, oil demand is expected to recover to 96.6 million barrels a day, with OPEC seeing a recovery by 3.3 million barrels per day in 2022, with global demand exceeding 100 million barrels per day (bpd) in the second half of 2022. Average demand of 99.9 million bpd is seen for the year.

Despite maintaining the same expectations, OPEC sees that the global economic conditions have already improved due to increased vaccinations and recovery from the coronavirus pandemic.

OPEC also expects an increase in supplies, with non-OPEC output seen growing by 270,000 bpd this year and by 840,000 bpd in 2022.

The OPEC+ commitment to the current level of output cuts stood at 115%, despite OPEC members increasing production in July by about 640,000 bpd to 26.7 million.