- Brent crude traded down to the lowest level in five weeks Monday morning after OPEC+ makes a deal and a coronavirus surge threatens the demand recovery
- OPEC+ has agreed to increase production into 2022 while readjusting certain member quotas
- The delta variant coronavirus has surged in Asia, helping drive equities lower (Bloomberg)
- The US dollar is also on the rise, putting downward pressure on oil prices
- OPEC and its allies have agreed to add 400 MBbl/d each month from August until all previously held back production is revived
- The deal comes ahead of the lengthy Islamic holiday and allows monthly supply hikes next month. If OPEC waited much longer, it was more likely that a supply cut would only come as early as September
- The UAE was able to compromise and was able to increase its quota starting in May of 2022 (Reuters). Interestingly, but perhaps not surprising, Saudi Arabia and Russia were also allowed to increase their quota’s next year as well