Oil prices drop on Monday

Oil prices decreased on Monday parallel to OPEC+ supply cuts entering into force, driven by weak Chinese demand, Reuters reported on Monday.

Brent crude traded at $79.77 a barrel on Monday morning, while U.S. West Texas Intermediate (WTI) traded at $76.15.

Baden Moore, head of commodity and carbon strategy at National Australia Bank (NAB) expected oil prices will be affected by foreseen rate hikes.

The possibility of further rate hikes would “drive an increase in near-term price volatility,” Moore said.

Moore also predicted “oil market will be in deficit through the remainder of the second quarter.” A recovery of Chinese or OECD demand is expected to “to drive prices higher.”

OPEC+ countries have announced last April their plan to cut oil production with around 1.16 million barrels per day. The decision is effective starting from May and until the end of the year.