On Monday, oil prices fell, retreating from five-week highs reached last week on concerns of tighter supply in the wake of OPEC+ cuts and in advance of a fresh embargo on Russian oil by the European Union.
Futures for Brent crude dropped 81 cents, or 0.8%, to $97.11 per barrel as of 8.31 a.m. Thai time, while futures for West Texas Intermediate crude down 76 cents, or 0.8%, to $91.88 per barrel.
The Organization of the Petroleum Exporting Countries and its allies known as OPEC+ agreed last week to a production cut of by 2 million barrels per day from November in an attempt to recover declining crude oil prices in the last few months.
Brent and WTI posted their biggest percentage gains since March after OPEC+’s announcement.
The OPEC+ production reductions, which come ahead of a European Union embargo on Russian oil, will further constrain supply in an already tight market. Sanctions against Russian crude oil and refined petroleum products will be implemented by the EU in December and February, respectively.
According to Reuters, analysts at banks and brokerages have upped their crude price projections, expecting Brent to soar above $100 per barrel in the coming months.