Oil prices fall on fears amid the scandal surrounding Qatar05.06.2017

Oil prices fell by almost 1% on Monday amid concerns that severing relations with Qatar by the leading oil producer Saudi Arabia and other Arab countries could damage the global agreement to cut production.

Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed diplomatic relations and closed transport links with the largest LNG producer (Qatar) and leading condensate supplier, accusing it of supporting terrorist organizations and undermining stability in the region.

At first, these measures, which provoked geopolitical fears in the market, pushed Brent oil prices up by 1%. However, after a period, futures for Brent were traded at $ 49.52 per barrel, 0.86% lower than the previous close.

Futures for the US WTI mark fell 0.97% to $ 47.20 per barrel.

Qatar's oil production is about 600,000 barrels per day, being one of the lowest in OPEC, but tensions between cartel members may weaken the production cutback agreement aimed at supporting prices.

Although OPEC shipments declined in February-April, the Thomson Reuters Oil Research report, published on Monday, indicates that in May the figure most likely jumped to 25.18 million barrels per day, an increase of more than 1 million compared to April.

Futures for Brent fell by about 7% from the level of opening of trading on May 25, when OPEC decided to extend the agreement on production reduction until March 2018.

Oil production in the US, not participating in the global agreement, jumped more than 10% from mid-2016 to 9.34 million barrels per day. This is close to the levels of leading producers - Saudi Arabia and Russia.