Oil settles lower on weak demand despite OPEC+ cut extension
By Laura Sanicola
(Reuters) -Oil prices settled slightly lower on Monday, as demand headwinds counterbalanced a widely expected extension of voluntary output cuts through the middle of the year by the OPEC+ producer group.
Brent futures settled down 75 cents to $82.80 a barrel, while U.S. West Texas Intermediate (WTI) settled down $1.24, or 1.5%, to $78.74 a barrel.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) are extending their voluntary oil output cuts of 2.2 million barrels per day (bpd) into the second quarter to support prices amid global growth concerns and rising output outside the group.
However, the end of a warm winter across the northern hemisphere is weighing on oil prices despite the OPEC+ announcement, said John Kilduff, partner at Again Capital LLC in New York.
«We would have needed sustained heating oil demand to keep the complex up,» Kilduff said.
U.S. product supplies of distillate fuel oil, which includes heating oil, declined in December to 3.61 million barrels per day (bpd), down about 10% from November and the lowest since June 2020, data from the Energy Information Administration showed last week.
Talk of a ceasefire in Gaza was also weighing on oil prices, Kilduff added.
As market expectations for a rollover had grown more apparent recently, the OPEC+ reduction extension may have been increasingly priced in, said Walt Chancellor, an energy strategist at Macquarie.
«With OPEC loadings appearing steady and aggregate OPEC supply potentially showing little effect from incremental voluntary cuts implemented in Q1, we do not view the extensions from the broader group as particularly impactful,» he said.
Still, Russia's announcement that it was cutting its oil output
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