Oil widened losses after Opec+ establish a plan to return some barrels to the market this year.
Brent fell below $81 a barrel after a three-day decline, and West Texas Intermediate traded near $77. Production cuts will continue in full in the third quarter and then be phased out over the next 12 months, the Saudi Energy Ministry said after the weekend OPEC+ meeting.
The agreement aims to continue supporting oil prices while easing production restrictions that have irritated some members, such as the United Arab Emirates, as they sought to improve their production levels. Most market observers expected the restrictions to continue until the end of the year.
Oil limited a monthly loss on Friday on growing concerns about China's demand outlook and as crude supplies rise outside the Organization of the Petroleum Exporting Countries and its allies. The fast Brent spread briefly fell into a bearish contango structure last week, and money managers have been trimming bets on rising prices.
The weakness is being reflected in product markets, and profits from making fuels such as diesel are declining. Structural factors such as the entry into operation of new refineries in the Middle East have contributed to depressing prices.
Futures remain higher this year after geopolitical tensions from the Middle East to Ukraine raised supply concerns. Israel has rejected a ceasefire plan presented by US President Joe Biden, as the war in Gaza approaches its eighth month.
