Oil prices have declined following a deal announced by the Organization of the Petroleum Exporting Countries (OPEC) last week to increase production.
OPEC members and other producers, including Russia, held a meeting in Vienna, Austria, last week to discuss production policy.
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The producer group is expected to raise production by one million barrels per day (bpd).
This comes after around 18 months of supply cuts by the OPEC-led group to sustain the markets and enable a rise in prices.
Brent crude futures decreased 1.7% to trade at $74.25 a barrel, while US West Texas Intermediate (WTI) crude futures dropped 0.2% to touch $68.42, Reuters reported.
WTI is supported by a marginal reduction in US drilling activity and a supply outage at Syncrude Canada’s oil sands facility.
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By GlobalDataLast month, Brent soared to more than $80 a barrel, supported by strong demand and the voluntary cuts by the OPEC.
However, prices have since fallen since following expectations that the producer group will increase output.
Unplanned disruptions in Venezuela and Angola have pushed the group’s output below the targeted cuts.
Despite the announcement made by OPEC to increase production, analysts forecast global oil markets to remain relatively stable this year.
Following the meeting in Vienna on 22 June, a press conference was held the next day in which OPEC indicated a bigger increase in supply.
Goldman Sachs was quoted by the news agency as saying: “Saturday’s OPEC press conference provided more clarity on the decision to increase production, with guidance for a full one million barrels per day ramp-up in 2H18.
“This is a larger increase than presented Friday, although the goal remains to stabilise inventories, not generate a surplus.”
Baker Hughes noted that energy companies cut one oil rig in the US last week.
With the reduction, the first in 12 weeks, the total rig count now stands at 862, Baker Hughes said.
