Global oil prices drop below $70 as OPEC+ reaches deal on output boost

Major global crude benchmarks Brent and WTI continued to trade below $70 per barrel on Tuesday after the Organization of the Petroleum Exporting countries (OPEC) and allies reached a deal to raise oil production.

US crude benchmark WTI fell nearly 8% and closed around $66 a barrel on Monday, marking the biggest one-day decline since September 2020. It now stands 13% below its peak high in over six years of $77 a barrel, reached in July.

Monday’s trading also saw international benchmark Brent crude plunging nearly 7% and settling below $69 a barrel.

Oil prices dropped after OPEC+ reached an agreement on boosting oil production by 400,000 barrels a day each month starting in August amid increasing global demand. The deal was initially stalled by the United Arab Emirates when it demanded the cartel increase its baseline production quota, which is now to be raised.

OPEC+ nations are set to boost output gradually through September 2022, by which point oil production is supposed to settle back at pre-Covid-19 levels. The group is currently withholding some 6 million barrels of crude a day out of the 10 million barrels that were cut from the market during the worst of the pandemic.

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