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Oil prices fell on Monday, April 5, erasing strong gains made in the previous session, which were supported by OPEC+ decision to gradually ease some of its restrictions on production between May and July.
Brent crude for June delivery fell 61 cents, equivalent to 0.9%, to $64.25 a barrel while US West Texas Intermediate crude for May delivery fell 53 cents, or 0.9%, to $60.92 a barrel.
Both contracts were settled up more than two dollars a barrel on Thursday, as investors considered the OPEC+ decision as confirmation of a demand-led recovery, and optimism increased by US President Joe Biden’s plan to spend on infrastructure worth $2 trillion.
Markets were closed on Friday for the Easter holiday.
The Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC+, agreed to ease production restrictions by 350,000 barrels per day in May, another 350,000 barrels per day in June and about 400,000 barrels in July.
The decision came after the new US administration called on Saudi Arabia, the world’s largest oil exporter, to keep energy prices within the reach of consumers despite concerns related to the demand, as parts of Europe are still subject to lockdown measures, while Japan is likely to expand the scope of emergency measures necessary to contain the wave New infections with the Coronavirus.
Under Thursday’s deal, OPEC+ cuts will be at just over 6.5 million bpd in May, compared with just under 7 million bpd in April.
