Crude oil dips on output hike but supply to remain tight

London: Brent crude oil fell on Monday as investors prepared for an extra 1 million barrels per day (bpd) in output to hit the markets after Opec and its partners agreed to raise production.

Despite the increase, which is intended to stop the gap between global supply and demand from becoming too wide, analysts said global oil markets would likely remain relatively tight this year.

Brent crude futures fell $1.15 to $74.40 a barrel by 1448 GMT, while US light crude rose 20 cents to $68.78 a barrel, supported in part by a Canadian supply outage.

Prices initially jumped after the deal to increase output was announced late last week, as it was not seen boosting supply by as much as some had expected.

“Opec are really going all-out to prevent oil prices from biting in the second half of the year,” SEB head of commodities Bjarne Schieldrop said.