Oil prices fell Monday, adding to last week’s losses on doubts over the extent of the output cuts by a group of top producers as well as concerns over weakening global demand. 

By 09:15 ET (14.15 GMT), the U.S. crude futures traded 0.8% lower at $73.45 a barrel and the Brent contract dropped 0.8% to $78.28 a barrel. 

Skepticism over OPEC’s voluntary cuts

The crude market fell around 2% last week after the Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, agreed new additional cuts of a little under 900 million barrels a day in the first quarter of 2024.

However, these cuts were voluntary in nature, raising doubts about whether or not producers would fully implement them as they still require the funds generated by the sale of these barrels.

“The announcement from the OPEC+ meeting failed to convince the market about a tighter oil balance in the immediate term,” said analysts at ING, in a note. “Pessimism over compliance with the new deal remains one of the major concerns for the market for now.”

Number of U.S. oil rigs grows 

Adding to the worries of a tight global oil market, weekly data from Baker Hughes showed that the U.S. added five oil rigs over the last week, taking the total oil rig count to 505. 

U.S. oil rigs have now increased to their highest level in nearly two months, adding to total U.S. production levels, although the recent weakness in oil prices could weigh on further rig additions over the coming weeks.

Global economic concerns 

Concerns about weak global manufacturing activity have also weighed on the crude market.

Surveys on Friday showed global manufacturing activity remained weak in November on soft demand, with eurozone factory activity contracting, while there were mixed signs on the strength of China's economy.

U.S. factory orders are expected to show a contraction of 2.6% in October later Monday, but most attention will be on Friday’s November official jobs report to see whether economic growth in the world’s largest crude consumer is continuing to level off.

Red Sea attacks see resurgence in Middle East supply concerns 

Elsewhere, the Pentagon said over the weekend that multiple U.S. military and commercial vessels were attacked in the Red Sea, while Yemen’s Houthi Group claimed it had carried out drone and missile attacks on Israeli vessels in the area. 

Concerns surrounding the Israel-Hamas war had steadily trickled out of markets over the past month, as the conflict had so far caused little disruptions in Middle Eastern supplies. 

But the new attacks could herald a potential spillover of the conflict, drawing in the U.S. and other Middle Eastern powers and potentially disrupting supplies. 

Last week, talks to extend a week-long truce between Israel and Hamas had collapsed, sparking a resumption in the war.