Oil Prices Decline in Early Trade

4 Jun 2024 , 09:11 AM

Due to market concerns about supplies increasing later in the year, oil prices dropped in early trade on Tuesday, prolonging their losses from the previous session when they hit their lowest point in four months.

Futures for Brent crude dropped 20 cents, or 0.3%, to $78.16 a barrel. Brent fell more than 3% on Monday and closed below $80 for the first time since February 7.

WTI Crude oil futures for the United States fell 0.2%, or 17 cents, to $74.05. It had also dropped 3.6% on Monday and was close to a four-month low.

On Sunday, the Organisation of the Petroleum Exporting Countries (OPEC+) and its allies, led by Russia, decided to extend the majority of its oil output restrictions until 2025. However, they allowed space for the eight members’ voluntary cutbacks to be gradually undone starting in October.

In recent months, data on fuel consumption in the United States has been a focal point for signs of slowing demand growth and its impact on oil prices. According to GasBuddy data, the average price of petrol in the US decreased by 5.8 cents to $3.50 per gallon on Monday.

On Wednesday, the US government will make data about inventories and product suppliers available. As a stand-in for demand, the product delivered will indicate the amount of petrol used during the Memorial Day weekend, which marks the beginning of the driving season in the United States.

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