After the oil producers’ union, Opec, agreed to another significant supply increase in September, oil prices fell on Monday. By 5.09 p.m. UAE time on Monday, Brent, the benchmark for two-thirds of the world’s oil, had dropped 2.2% to $68.12 a barrel, while West Texas Intermediate, the indicator that measures US crude, had fallen 2.5% to $65.6 a barrel.
To reclaim market share, the Organization of the Petroleum Exporting Countries (Opec) and its allies decided on Sunday to increase oil production by 547,000 barrels per day for September. This is the most recent in a series of expedited output increases.
With the change, Opec’s most significant tranche of output cuts, which amounts to around 2.5 million barrels per day, or 2.4% of global demand, is fully and early reversed.The brief 14-minute discussion indicated that there was widespread support for the move and no opposition, according to Giovanni Staunovo, a strategist at the Swiss bank UBS.
One layer of the voluntary crude production restrictions of 2.2 million barrels per day [mbpd] was unravelled entirely by the group with its decision on Sunday. A capacity-related quota adjustment of 0.3 mbpd for the UAE is included in the production quota increase between March and September.
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