Oil futures ended lower on Monday, unable to hold on to gains seen after Saudi Arabia announced it would extend a 1 million bpd output cut through August and Russia said it would cut exports this month at 500,000 barrels per day.
West Texas Intermediate crude for delivery in August CL00,
It fell 85 cents, or 1.2%, to end at $69.79 a barrel on the New York Mercantile Exchange.
September Brent Crude BRN00,
the global benchmark, settled at $74.65 a barrel on ICE Futures Europe, down 76 cents, or 1%.
Back to Nymex, August gasoline RBQ23,
fell 3.2% to $2.462 a gallon, while August HOQ23 diesel,
decreased 2.9% to $2.377 a gallon.
August natural gas NGQ23,
shed 3.2% to close at $2.709 per million British thermal units.
US markets will be closed on Tuesday for Independence Day.
Crude oil futures rose after Saudi Arabia’s energy ministry said a voluntary cut of 1 million barrels a day that took effect this month would be extended through August, keeping the production of the country at 9 million barrels per day.
Also on Monday, Russian Deputy Prime Minister Alexander Novak said the country would curb exports by 500,000 barrels a day in July, according to news reports, “as part of efforts to ensure oil markets remain balanced.”
Oil rose modestly after the announcements, but not enough to cause a “material pullback,” analysts at Sevens Report Research wrote.
Saudi Arabia had announced a voluntary July cut of 1 million barrels per day on June 4 as the Organization of the Petroleum Exporting Countries and its allies agreed to maintain previous production curbs. Saudi Energy Minister Abdulaziz bin Salman said the cut could be extended.
Skepticism in Russia was also at play.
“The key question remains whether oil prices will overcome the recent trend of not being able to hold on to their OPEC-related gains,” Fawad Razaqzada, market analyst at City Index and Forex.com, said in a note.
“Each time prices have risen due to the group’s supply cuts, traders have sold that move amid skepticism about the effectiveness of those cuts when Russia has consistently produced and sold more oil than ‘had agreed,’ he wrote. “Will it be different this time?”
The market’s muted response indicates that traders want to see evidence that Russia is complying, Razaqzada said.
Oil futures ended Friday with monthly gains, but WTI posted a second straight quarterly drop, down nearly 7%, and Brent posted a fourth straight quarterly loss, up more than 6%.
I will see: Do you think the 2023 stock market rally is impressive? Don’t forget to move away.
Meanwhile, analysts and traders have remained skeptical that Russia has followed through on its promise earlier this year to cut output by 500,000 barrels per day by the end of the year.