After OPEC+ unexpectedly released the plan to partly restore market production this year, crude oil plummeted, exacerbating the bearish trend of crude oil for months.

Global benchmark Brent crude oil futures fell 3.4% on Monday, closing slightly above $78 per barrel; WTI crude oil futures fell 3.6%, closing near $74 per barrel. The prices of both benchmark crude oil futures are the lowest since February.

OPEC+ agreed last weekend to partially restore production cuts starting in October, earlier than many market observers expected. Cuts will continue fully in the third quarter and then gradually be phased out over the next 12 months. Analysts have been grappling with whether this decision will be bearish for crude oil or if the group can still manage the market.

With geopolitical risks easing and signs of weak demand, oil prices have fallen in the past two months. Evidence of a weak physical market has also emerged, with Brent crude's spot price spread narrowing to 13 cents, approaching a bearish structure, indicating adequate supply in the near term.

Ryan McKay, commodity strategist of TD Securities, wrote in a report on Monday that "the market is accepting the gradual end to voluntary cuts starting in October. The relief in the supply risk premium has put pressure on oil prices and differentials, and OPEC+ agreements have little impact on reversing this trend. "

Goldman Sachs said that OPEC+ decision is bearish as the gradual end to voluntary cuts suggests that although global oil inventories have recently increased, OPEC+ members are still eager to restore production. Other analysts also believe that the group's decision to gradually cut production is bearish for oil prices given the increase in output from non-OPEC countries such as high-interest rates and the United States.

Independent oil analyst Gaurav Sharma said:"Ultimately, various factors have come into play." He emphasized disappointing economic indicators such as the United States. The overnight_ISM manufacturing data released by the United States is very ugly and relatively "stagnant."

Sharma said:"When OPEC+ made a decision last weekend, in the context of the relatively adequate supply of the crude oil market, trading firms turned to net short positions considering the macro situation and reduced risk premiums (statements about the Gaza ceasefire)". An assistant to the Israeli Prime Minister confirmed last Sunday that Israel has accepted a framework agreement to end the Gaza war, although the Israeli side called it a flawed agreement.

However, UBS and RBC Capital Markets LLC believe that OPEC+ will maintain control of the market. Most analysts had expected OPEC+ to extend restrictions until the end of this year.

Signs of weakened demand in recent months have also weighed on oil prices, with US fuel consumption data becoming a focus.

The US government will release estimates of oil inventory and demand on Wednesday, which will show gasoline consumption around Memorial Day weekend (the beginning of the US driving season). John Kilduff, a partner at Again Capital, said:"Actual data shows that the market is sufficiently supplied. If we can't get an amazing number on Memorial Day, we're done." US gasoline futures fell more than 3% on Monday to a more than three-month low of $2.34 per gallon.