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Brent crude futures fell $1.14 cents, or 1.5%, to $77.22 a
barrel at 0825 GMT. Brent on Monday closed below $80 for the
first time since Feb. 7, after falling more than 3%.
U.S. West Texas Intermediate crude futures eased $1.23 cents, or
1.7%, to $72.99 a barrel. WTI on Monday fell by 3.6% to settle
near a four-month low.
The Organization of the Petroleum Exporting Countries and allies
led by Russia, together known as OPEC+, on Sunday agreed to
extend most of their oil output cuts into 2025 but left room for
voluntary cuts from eight members to be gradually unwound
beginning in October.
"The market reaction is depressing to anyone who produces oil
and brings elevated joy for consumers," said Tamas Varga of oil
broker PVM.
The increased supply from OPEC+ could be pumped into a market
where demand has already shown signs of weakness.
U.S. manufacturing activity slowed for a second straight month
in May, while construction spending in April fell unexpectedly
for a second month on declines in non-residential activity -
both of which could translate into weaker oil and fuel demand.
"With the 'bad news is bad news' mantra in place, further
evidence of economic weakness may lead oil prices lower,
potentially paving the way for a retest of the lower end of its
month-long range at the $72 level," IG market strategist Yeap
Jun Rong said in an email.
Signs of weakening demand growth have weighed on oil prices in
recent months, with data on U.S. fuel consumption in focus. The
average gasoline price in the United States declined 5.8 cents
per gallon to $3.50 per gallon on Monday, according to GasBuddy
data.
The U.S. government will release inventory and product supplied
data on Wednesday. [EIA/S]
Product supplied, considered a proxy for demand, will show how
much gasoline was consumed around the Memorial Day weekend, the
start to the U.S. driving season.
(Reporting by Paul Carsten in London and Arathy Somasekhar in
Houston and Trixie Yap in Singapore; editing by Jamie Freed and
Jason Neely)
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