Oil prices fell on Monday on concerns about oversupply as OPEC and its allies, together known as OPEC+, are due to pull back from production cuts in August while an increase in COVID-19 cases worldwide raised fears of slower pick-up in fuel demand. "Investors are worried about supply gluts as the OPEC+ is due to start reducing production cuts this month and a recovery in oil prices from record lows is expected to encourage U.S. shale producers to ramp up output," said Hiroyuki Kikukawa, general manager of research at Nissan (OTC:NSANY) Securities. "Also, fears over a resurgence in the coronavirus cases are weighing on oil markets," he said, predicting that the prices will stay in low $40s this week. Oil output by the Organization of the Petroleum Exporting Countries rose by over 1 million barrels per day in July as Saudi Arabia and other Gulf members ended their voluntary extra supply curbs on top of an OPEC-led deal, and other members made limited progress on compliance.
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