Crude oil prices were down at trading start on Tuesday with the possibility of OPEC and Russia ramping up production to counter U.S. shale producers obtaining a larger market share.
International benchmark Brent oil traded at $70.92 per barrel at 0618 GMT with a 0.5% decline, after ending Monday at $71.26 a barrel.
American benchmark West Texas Intermediate was at $63.27 a barrel at the same time for a 0.4% fall, having ended the previous session at $63.48 per barrel.
OPEC and Russia agreed on Dec. 7, 2018 to trim their total production by 1.2 million barrels per day (mbpd) for the first six months of 2019.
The deal pushed oil prices up by more than 30% since the beginning of the year, however, higher prices also led to the U.S. increasing its crude oil output to a record high level of 12.2 mbpd for the week ending March 29, thanks to rising shale oil production in the country.
With OPEC and Russia losing market share to U.S. shale, Russian Finance Minister Anton Siluanov signaled over the weekend that the group dubbed as OPEC+ could boost their production levels to regain their share in the global oil market.
Russian news agency TASS reported that Siluanov said if the OPEC+ deal is scrapped, oil prices would decline and U.S. output would be lower, since production costs for shale oil are relatively higher than conventional oil production.
Earlier on April 9, Russian President Vladimir Putin told Tass that his country would continue cooperating with OPEC to balance the oil market. He said Russia would also continue to monitor the market taking into account that hydrocarbon consumption, including oil, is set to increase during the summer.
As global oil demand rises during the summer season, this could boost prices further. Consequently, OPEC and Russia could decide to end the deal and raise their output to increase their revenues that are highly dependent on oil sales.
By Ovunc Kutlu