The price of oil fell below $64 U.S. a barrel as rising supply from the Organization of the Petroleum Exporting Countries (OPEC+) and their allies and higher Iranian output countered expectations for a broad-based demand recovery in 2021.
OPEC+ has agreed to monthly production hikes from May to July of this year. OPEC member Iran, exempt from making voluntary cuts, also plans to boost supply.
Brent crude oil for June fell $1.36, or 2.1%, to $63.50 a barrel. U.S. West Texas Intermediate crude for May dropped $1.29, or 2.1%, to $60.16.
Oil prices have recovered from historic lows reached last year with the support of record OPEC+ cuts, most of which will remain after July of this year, and some oil demand recovery that is expected to gather pace in the second half of the year.
While a slow vaccine rollout and return to lockdown measures in parts of Europe have weighed on the oil price rebound, figures released last week showed the U.S. economy created the most jobs in seven months in March, raising expectations for a strong economic recover in America.
Investors are also focused on indirect talks between Iran and the U.S. as part of negotiations to revive the 2015 nuclear deal between Tehran and global powers.