Crude oil prices have dipped after OPEC+ last week agreed to steadily curb output cuts between May and July this year.
Brent crude futures for June fell by 16 cents or 0.2% to reach $64.70 a barrel while US West Texas Intermediate crude for May slipped by 13 cents, or 0.2% to reach $61.32 a barrel, reported Reuters.
The two contracts settled more than $2 a barrel on hopes that fuel demand will pick up after the US President Joe Biden’s announcement of $2tn spending plan on infrastructure, and OPEC+ decision on oil policy.
Last week, the Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC+, decided to ease production curbs by 350,000 barrels per day (bpd) in May 2021.
It also plans to make cuts by another 350,000 bpd in June 2021 and further 400,000 bpd or so in the following month, according to the news agency.
The decision comes after Saudi Arabia has been urged by the new US administration to help make energy affordable for consumers despite concerns on demand.
Concerns on fuel demand are increasing as several European countries announced lockdowns while Japan plans to expand emergency measures to contain the new wave of Covid-19 pandemic.
Additionally, Saudi Arabia, which is world’s top exporter, announced it would phase out its extra voluntary cuts by July 2021, that would add one million bpd to the market.
Meanwhile, Iran and the US are set to begin indirect talks this week as part of broader negotiations to revive the nuclear deal signed in 2015.
EurAsia analyst Henry Rome was cited by the news agency as saying that he expects the US administration to lift sanctions, including restrictions on the Iranian oil sale, after the completion of these talks.
Rome added: “Diplomacy could stretch for months and nuclear compliance could take as long as three months.”