Oil holds near four-month low as OPEC+ plan sparks supply concerns

(Bloomberg) — Oil held losses near its lowest level in nearly four months after OPEC+'s plan to put barrels back on the market raised concerns about oversupply.

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Brent crude futures traded near $78 a barrel after the August contract fell 3.4% on Monday. West Texas Intermediate was above $74. The alliance is expected to begin ending production cuts as early as October, despite lingering concerns about the demand outlook and the robustness of supply from outside the group.

The return of barrels is earlier than some market observers had expected, and reactions to the agreement have been mixed, including doubts about the group's ability to actually increase its production in the face of the increase in the offer of its competitors. Major OPEC+ members have also recently exceeded their assigned quotas.

Oil prices have been trending lower since early April as geopolitical risks fade and demand shows signs of slowing, leading some refiners to cut operating rates. The rapid spread for Brent has narrowed again towards a bearish contango structure, signaling abundant near-term supplies.

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