Oil Prices Plunge With OPEC+ Announcement and Delta Variant Concerns

An oil storage tank at a refinery in Corpus Christi, Texas USA. (Matt Pierce)

Oil prices took the worst single-day plunge in more than a year as the market reacts to news from OPEC+ and to new Delta Variant concerns.

Oil prices dropped more than $5 USD per barrel, on Monday on the heels of news that OPEC+ would be boosting crude oil output and just as concerns begin arising that there could be a crude oil surplus as the threat of the new Delta Variant continues to cause concern around the world.

While crude oil prices have been rocky for the past two weeks, Monday marked a turning point as Brent crude sat at $68.17 a barrel at 2:21 p.m. CDT on July 19, 2021. That is down exactly 7% from one week ago. West Texas Crude (WTI) was also down over 8% to $65.99 per barrel at the same time on Monday.

On Sunday, OPEC+ members had made a deal that lower oil prices, which had recently hit their highest levels in over a month. The deal that OPEC+ member nations announced on Sunday removes market curbs that have been holding the market increases together for over a year.

OPEC+ nations have been holding back on putting in 5.8 million barrels per day of crude into the market. By mid-December 2021 OPEC+ says that they will reduce that number to 3.8 million barrels per day of crude oil which could lead to at least minor supply shortages in the future, especially if the world reacts in a strict manner against the rapidly spreading Delta Variant that is becoming a problem on a global scale, including right here in Texas.

Reporting and image by Matt Pierce. Data compiled through common search on markets.

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