Oil prices fell in early trading on Tuesday, extending losses from the previous session, when prices fell to four-month lows, as investors worry about rising supply later in the year.
Brent crude futures fell 20 cents or 0.3% to $78.16 a barrel. Brent closed below $80 for the first time since February 7, after falling more than 3% on Monday.
U.S. West Texas Intermediate crude futures fell 17 cents, or 0.2%, to $74.05. On Monday, after slipping 3.6%, it also settled near a four-month low.
The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, agreed on Sunday to extend most oil production cuts until 2025, but left room for eight members’ voluntary cuts, which they will be phased out starting in October.
The extension of voluntary cuts into the third quarter is set to amplify the summer tension in crude oil, while the possibility of a return to supply from October represents a stronger indication that extreme levels of market support from the ‘OPEC+ may not last forever, said Walt Chancellor, energy strategist at Macquarie.
Signs of weakening demand growth have also weighed on oil prices in recent months, with U.S. fuel consumption data taking center stage. The average price of gasoline in the United States fell 5.8 cents a gallon to $3.50 a gallon on Monday, according to data from GasBuddy.
The US government will release data on inventories and products supplied on Wednesday. The product provided, considered a proxy for demand, will show how much gasoline was consumed over Memorial Day weekend, the start of the U.S. driving season. (Reporting by Arathy Somasekhar in Houston; Editing by Sonali Paul)
