Oil prices extend losses on worries of supply rising later in 2024

Oil prices eased in early trade on Tuesday, extending their losses from the previous session when prices fell to their lowest in four months, as investors worried about supply ticking up later in the year.

Brent crude futures fell 20 cents or 0.3 % $78.16 a barrel. Brent closed below $80 for the first time since Feb. 7, after falling more than 3% on Monday.

U.S. West Texas Intermediate crude futures eased 17 cents, or 0.2% to $74.05. It had also settled near a four-month low on Monday after sliding 3.6%.

The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, on Sunday agreed to extend most of their oil output cuts into 2025 but left room for voluntary cuts from eight members to be gradually unwound from October onward.

The extension of voluntary cuts through the third quarter stands to amplify summertime tightness in crude, while the possibility of some supply coming back from October represents a stronger indication that extreme levels of market support by OPEC+ may not last forever, said Walt Chancellor, an energy strategist at Macquarie.

Signs of weakening demand growth have also weighed on oil prices in recent months, with data on U.S. fuel consumption in focus. The average gasoline price in the United States declined 5.8 cents per gallon to $3.50 per gallon on Monday, according to GasBuddy data.

The U.S. government will release inventory and product supplied data on Wednesday. Product supplied, considered a proxy for demand, will show how much gasoline was consumed around the Memorial Day weekend, the start to the U.S. driving season.