Brent sheds over 2% amid uncertainty over the global output cut agreement

Brent crude continued to drop as the US market opened on Tuesday, to drop more than 2%, near its 2-week low hit yesterday, amid uncertainty over the OPEC-Plus output cut agreement and on every major producer's share from the cut.

Brent fell 2.3% to $31.10 a barrel, after opening at $32.22, with a high of $32.30.

Brent lost 2.7% yesterday, its second daily loss, and hit a 2-week low of $30.64, following a lackluster reception of the record OPEC-Plus agreement.

Brent has lost 9% during the past week, posting its sixth weekly loss in 7 weeks, on tensions in the OPEC-Plus coalition, and concerns over global demand.

On Sunday, he OPEC-Plus coalition agreed on a historical production cut agreement by 9.7 million barrels per day, starting next May.

The record agreement came after 4-day weary talks, after President Donald Trump pressed to balance the oil market and the falling prices.

The OPEC-Plus coalition will implement a production cut by 9.7 million barrels per day, starting next May until June, but the cut will be reduced 7.7 million bpd from July until the end of 2020, and will be reduced again to 5.7 million bpd starting in January 2021 to April 30, 2022.

The coalition also stated that non-OPEC producers, such as the US, Canada, Brazil and Norway, should cut output by 5%, which is around 5 million bpd.

Reuters quoted sources that the actual production cuts could reach 20 million bpd, due to extra voluntary cuts by some members of OPEC-Plus and non-members.

However, the size of the non-OPEC producers cut remains unclear, as the US, the world's largest oil producer, has not announced its share from the historical agreement, and Trump's recent remarks have also added to the lingering uncertainty about the total size of the cut.

"Having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 Million Barrels a day, not the 10 Million that is generally being reported," Trump said via Twitter.

While the US Energy Information Administration estimated that the US shale oil production will sharply drop in April, due to US companies losses from the falling oil prices.

Many see that oil will remain weighed down by the disequilibrium between supply and demand, as the global demand for oil has dropped by 30% due to the coronavirus crisis.