Brent crude oil is down by 2.26% to $71.64 per barrel
OPEC and its allies have reached an agreement to increase oil supply in an effort to keep soaring crude oil prices under control.
The group will now pump an additional 400,000 barrels per day each month during August, increasing output by 2m barrels per day by the end of 2021.
The monthly increases will rise next year, as OPEC+ confirmed it has extended the deal from April next year to December 2022.
During the pandemic, OPEC and its allies slashed production by 10m barrels a day as the downturn saw a collapse in demand for oil and prices.
However, as economies are reopening, the price of oil is surging again, which is leading to inflationary pressures and brining the recovery of the world economy into doubt.
Brent crude oil is down by 2.26% to $71.64 per barrel, while West Texas Intermediate also slipped by 2.24% to $69.85.
Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said the deal proves that the group is able to strike agreements and gives more certainty over the future.
“This agreement should give market participants comfort that the group is not headed for a messy break-up and will not be opening up the production floodgates any time soon,” Helima Croft at RBC Capital Markets told The Times.
