Oil was down on Monday morning in Asia, unable to hold onto its gains from the previous session.
Brent oil futures lost 3.57% to $25.66 and WTI futures slid 8.04% to $18.19, even as a 10-million-barrel daily cut in production agreed to by OPEC+ in early April coming into effect on Friday.
Brent futures have fallen almost 60% this year, hitting a near-21-year low last month.
Energy services firm Baker Hughes Co also said that U.S. energy firms cut oil rigs for a seventh week in a row. These cuts brought totals down to 325, the lowest since June 2016.
Meanwhile, OPEC raised production sharply to its highest level since March 2019 in advance of the cuts on Thursday.
There are already concerns that producers will struggle to meet their production cut quotas, with OPEC’s second-largest producer Iraq predicted to face difficulty meeting its commitment to cut output by nearly a quarter.
Even as more countries ease their lockdown measures with dropping numbers of COVID-19 case, some investors expressed doubt that the increased demand and cuts could solve the oversupply problem.
“The demand recovery will be a muted affair,” Stephen Brennock of oil broker PVM told CNBC.