SULAIMANI (ESTA) — Oil prices dropped on Monday after OPEC+ agreed to gradually ease some of its output cuts between May and July.
Brent crude futures for June fell 95 cents to $63.91 a barrel by 0617 GMT while U.S. West Texas Intermediate crude for May was at $60.58 a barrel, down 87 cents.
Both contracts settled up more than $2 a barrel after OPEC+ decision and on optimism about energy demand after U.S. President Joe Biden outlined a $2 trillion infrastructure spending plan, according to Reuters.
OPEC and its allies including Russia, a group known as OPEC+, agreed on Thursday to ease production curbs by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June and further 400,000 bpd in July.
Under the accord, OPEC+ cuts would be just above 6.5 million bpd from May, compared with slightly below 7 million bpd in April.
This week, investors are also focused on indirect talks in Vienna between Iran and the world powers including the United States as part of broader negotiations to revive the 2015 nuclear deal between Tehran and global powers, Reuters reported.
Reuters cited Eurasia’s analyst Henry Rome as saying he expects U.S. sanctions, including restrictions on the sale of Iranian oil, to be lifted only after these talks are completed and until Iran returns to compliance.
“Diplomacy could stretch for months and nuclear compliance could take as long as three months,” he said in a note, adding that implementation of such a deal and a ramp-up of oil exports could stretch into early 2022.
