U.S. oil prices falls around 8% to under USD70 while OPEC plans to incraese production, Covid worries contribute

West Texas Intermediate crude futures drop under the main USD70 mark on Monday July 19, 2021, for the very first time in a long time as OPEC and its partners agreed to increase output, and as the delta Covid variant fears the world demand.

U.S. oil prices settled at USD66.42 per barrel which is 7.51% lower for its nastiest day since September 2020, post trading as small as USD65.47 throughout the session. The agreement is now more than 13% lower its latest high of USD76.98 from July 6 that was the peak level in a long time of about six years. Global standard Brent crude dropped and settled at USD68.62 per barrel with a drop of 6.75% on Monday.

The OPEC+, agreed on Sunday to boost production by 400,000 barrels each month starting from August. The outcome increase will persist throughout September 2022, at which point the entire of the almost 6 million barrels per day, the association is still preserving will return to the market.The declaration came post the group’s first meeting July 1 failed due to differences between the United Arab Emirates and Saudi Arabia regarding the latter’s standard production share.

Goldman Sachs stated in a letter to clients that they see Sunday’s deal as helpful to their productive oil price outlook with supply slowly being the source of the optimistic inclination and proof of non-OPEC supply shortfalls probable in the upcoming months.While prices for oil have returned to the pre-pandemic marks, prices for fuel have spurred. The nationwide average for one gallon of usual gas stood at USD3.17 as per AAA, which is more by 97 cents as compared to 2020.