Oil prices fall more than 1% after OPEC+ agrees to boost supply

Oil prices fell more than 1% on Monday, hit by an agreement over the weekend within the OPEC+ group of producers to boost output after an earlier pact fell apart due to objections from the United Arab Emirates (UAE).

Brent crude was down $1, or 1.4%, at $72.59 a barrel by 0037 GMT, after falling nearly 3% last week. U.S. oil was down 94 cents, or 1.3%, at $70.87 a barrel, having declined almost 4% last week.

OPEC+ ministers agreed on Sunday to increase oil supply from August to dampen prices that earlier this month climbed to the highest in around two and a half years as the global economy recovers from the COVID-19 pandemic.

The group, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, together known as OPEC+, agreed new production shares from May 2022.

"This agreement should give market participants comfort that the group is not headed for a messy breakup and will not be opening up the production floodgates anytime soon," RBC Capital Markets said in a note.

OPEC+ agreed new production quotas for other members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq.

The group last year cut output by a record 10 million barrels per day (bpd) amid an evaporation in demand the pandemic developed, prompting a collapse in prices with U.S. oil at one point falling in negative territory.

It has gradually brought back some supply, leaving it with a reduction of around 5.8 million bpd.