Global benchmark Brent crude fell below $78 a barrel, nearing its July low, despite Saudi Arabia’s announcement that OPEC+ supply cuts could extend beyond March if necessary.
Brent crude futures dropped by 0.9% to $77.36 a barrel, and U.S. West Texas Intermediate crude futures lost 0.9% to $72.40. Analysts noted a tepid attempt to boost the market following OPEC+ announcements, speculating that the underlying picture remains disappointing, according to Reuters.
Saudi Arabia’s suggestion of possible production cut extensions offered some support. The OPEC+ agreement outlined voluntary output cuts of around 2.2 million barrels per day for Q1 2024, with a significant portion being an extension of existing voluntary curbs.
Ongoing geopolitical concerns, including the Israel-Hamas conflict and attacks on vessels, contributed to supply worries. On the demand side, the European Central Bank signaled a cautious approach to interest rate hikes due to a notable fall in inflation.
In contrast, U.S. data revealing a larger-than-expected fall in factory orders raised concerns about weakening demand.