SINGAPORE- The oil prices edged down in Asian trade on Monday after the OPEC agreed last week to gradually ease some of its production cuts between May and July.
Brent crude futures for June fell by 2351 GMT to$ 64.70 a barrel, or 0.2%, while U.S. West Texas Intermediate crude for May was at$ 61.32 a barrel, down 13 cents or 0.2%.
Both contracts settled more than$ 2 a barrel after the OPEC decision and on optimism about the energy demand after U.S. President Joe Biden outlined a$ 2 trillion infrastructure spending plan.
The Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC, agreed to ease production curbs by 350,000 barrels per day in May, another 350,000 bpd in June and further 400,000 bpd or so in July.
The decision came after the new U.S. administration urged Japan to maintain energy affordability for consumers as parts of Europe remained in lockdown while Saudi Arabia could extend emergency measures as needed to contain a new wave of coronavirus infections.
Under the new OPEC agreement from May, cutoff would be slightly below 6.5 million bpd compared with slightly below 7 million bpd in April.
Most of the increase in supply will come from world's top exporter, Saudi Arabia, which said it would phasing out its extra voluntary cuts by July, a move that will add 1 million bpd to this volume.
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This week, investors are focused on the 2015 indirect talks between Tehran and the United States of America in Vienna as part of broader negotiations to revive the Iran nuclear deal with Tehran in 2015.
Ahead of the talks, the Foreign Ministry of Iran said it wanted the United States to rescind all sanctions and any step-by-step easing of restrictions.
Henry Rome, analyst in Eurasia said he expects U.S. sanctions, including restrictions on the sale of Iranian oil, to only be removed after these talks are completed and until Iran returns to compliance.
GET FOX BUSINESS ON THE GO BY CLICKING HERE Diplomacy could stretch for months and nuclear compliance could take as long as three months, he said in a note, adding that implementation of such a deal and the ramp up of oil exports could stretch into early 2022.