The West Texas Intermediate for August delivery lost 45 cents to settle at 40.75 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for September delivery was down 42 cents to close at 43.37 dollars a barrel on the London ICE Futures Exchange.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, on Wednesday decided to scale back the record production cuts to 7.7 million barrels per day (bpd) starting from August.
The move was in line with expectations, and those countries that previously exceeded the agreed production targets have to undertake to offset this overproduction by September by cutting their output accordingly, Eugen Weinberg, energy analyst at Commerzbank Research, said in a note on Thursday.
Paul Sheldon, chief geopolitical advisor with S&P Global Platts Analytics, told Xinhua that actual production increase with OPEC+ would be roughly 1.5 million bpd in August thanks to partially fulfillment of compensation mechanism by some crude oil producing countries.
OPEC+ agreed in April to slash output by 9.7 million bpd for May and June as the COVID-19 pandemic ravaged demand, and decided in June to extend the record production cuts until the end of July.