Oil Retreating After gains Due to Production Cuts

Oil prices maintained most of last night’s gains, Tuesday, August 18, after the OPEC + group said that members had almost fully committed to the agreed production cuts to support prices amid a decline in fuel demand due to the Coronavirus pandemic.

By 07:02 GMT, Brent crude was down 18 cents, the equivalent of 0.4%, to $ 45.19 a barrel, after rising 1.3% on Monday. US crude fell 26 cents, or 0.6%, to $ 42.63 a barrel, after rising by 2.1% in the previous session.

The percentage of commitment to OPEC + production cuts reached about 97% in July, two sources in the alliance told Reuters. Oil producers have reduced production unprecedentedly to reduce global inventories, in light of the collapse of demand due to the pandemic.

In August, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as the OPEC + group, began to reduce the agreed production cuts to 7.7 million barrels per day from 9.7 million barrels per day.