An aerial view shows a crude oil tanker at an oil terminal off Waidiao island in Zhoushan, Zhejiang province, China January 4, 2023. China Daily via REUTERS
Oil prices extended declines on Monday, pressured by investor scepticism over the latest OPEC+ decision on supply cuts and uncertainty surrounding global fuel demand, though the risk of supply disruptions from the Middle East conflict limited losses.
Monday's fall adds to a 2% decline last week after the supply cuts announced on Thursday by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+.
Brent crude futures were down $1.10, or 1.4%, at $77.78 a barrel by 0921 GMT. U.S. West Texas Intermediate crude futures fell $1.09, or 1.5%, to $72.98.
"Crude seems to be under continued pressure from the OPEC+ decision," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
The OPEC+ cuts were voluntary in nature, raising doubts about whether or not producers would fully implement them. Investors were also unsure about how the cuts would be measured.
The latest data implies strong economic headwinds that reinforce concerns about oil demand growth, said Tamas Varga of oil broker PVM.
Geopolitical considerations were back in focus as fighting resumed in Gaza. Three commercial vessels came under attack in international waters in the southern Red Sea, the U.S. military said on Sunday.
Elsewhere, Western countries have stepped up efforts to enforce the $60 a barrel price cap on seaborne shipments of Russian oil imposed to punish Moscow for its war in Ukraine.