Crude prices sink on high output despite planned OPEC production cut
On Monday, crude prices sank from $50 per barrel notwithstanding an agreement the previous week by crude exporters to minimize output, with investors doubting the step was enough to rein in output that has surpassed consumption for the better part of three years.
Brent crude futures lost 0.5%, trading at $49.94 per barrel. American West Texas Intermediate futures slumped 0.5% too, being worth $47.98 a barrel.
The drops follow fresh production peaks from the Organization of the Petroleum Exporting Countries as opposing members, including Iran, Saudi Arabia and Iraq don’t want to give away market share.
In September OPEC's crude output is likely to hit 33.60 million bpd from August’s revised outcome of 33.53 million bpd, its highest in recent history.
Market participants stressed there was more downside risk to crude prices if the planned dip wasn't deep enough to bring output back in line with consumption.