On Monday's early trading, despite OPEC+ announcing an extension of significant production cuts until 2025, oil prices still fell.
As of 0030 GMT, Brent crude futures for August delivery fell by 24 cents, or 0.3%, to $80.87 per barrel.
U.S. West Texas Intermediate (WTI) crude futures for July delivery dropped by 19 cents, or 0.25%, to $76.80 per barrel.
Currently, OPEC+, comprising the Organization of the Petroleum Exporting Countries and allies led by Russia, is collectively cutting production by 5.86 million barrels per day, equivalent to 5.7% of global demand.
This includes a previously planned cut of 3.66 million barrels per day until the end of 2024, and a voluntary cut by eight member countries of 2.2 million barrels per day, originally scheduled to end in June 2024.
However, on Sunday, the organization agreed to extend the 3.66 million barrels per day cut by one year until the end of 2025. Additionally, the 2.2 million barrels per day cut will be extended by three months to the end of September 2024, and then gradually phased out from October 2024 to September 2025.
Goldman Sachs analysts stated in a report that despite the extension of the production cut plan, the meeting was seen as bearish because eight OPEC+ countries announced plans to gradually phase out the voluntary 2.2 million barrels per day cut from October 2024 to September 2025.
Analysts said, "The unexpectedly detailed communication of the phased-out additional cut plan makes it more challenging to maintain low production levels when the market is weaker than expected."
"The communication of the phased-out plan reflects a strong desire by some member countries to resume production amid high idle capacity."
