Oil falls more than $1 on worries of supply rising later in 2024

U.S. West Texas Intermediate crude futures eased $1.23 cents, or 1.7%, to $72.99 a barrel. WTI on Monday fell by 3.6% to settle near a four-month low.

The 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 beginning in October.

"The market reaction is depressing to anyone who produces oil and brings elevated joy for consumers," said Tamas Varga of oil PVM.

The increased from OPEC+ could be pumped into a market where demand has already shown signs of weakness.

U.S. manufacturing activity slowed for a second straight month in May, while construction spending in April fell unexpectedly for a second month on declines in non-residential activity - both of which could translate into weaker oil and .

"With the 'bad news is bad news' mantra in place, further evidence of economic weakness may lead oil prices lower, potentially paving the way for a retest of the lower end of its month-long range at the $72 level," market strategist Yeap Jun Rong said in an email.

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

The U.S. government release and data on Wednesday. [EIA/S]

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.