Oil hammered as Opec+ announces output hike

The global oil market was hammered on Monday as investors digested Saturday’s announcement by the Organisation of Petroleum Exporting Countries and its allies (Opec+) about going ahead with increases in crude production.

- Somshankar Bandyopadhyay [e-mail]

In morning trading, Brent crude futures fell as much as 3.5 per cent, while US West Texas Intermediate crude fell 3.8 per cent.

The market pared gains later in the day. Brent crude futures dropped by 90 cents, or 1.47 per cent, to $60.39 a barrel by 1320 GMT, while US West Texas Intermediate crude was at $57.31 a barrel, down 98 cents, or 1.68 per cent, Reuters reported.

Last week, Brent shed 8.3 per cent and WTI 7.5 per cent as Saudi Arabia said it could cope with lower prices. "Opec+'s decision to extend the 411,000 barrels-per-day production increase planned for May into June has raised concerns about a potential global supply glut, especially at a time when trade tensions threaten to dampen demand," Ole Hansen, head of commodities strategy at Saxo Bank, wrote in a note.