On Monday, as reported by CNBC, European markets dropped after the markets digested the most recent announcement by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) regarding oil production along with brooding on inflation and the surge in COVID-19 cases.
In early trade, the STOXX Europe 600 Index’s declined 1.2 percent. Due to all sectors and major businesses falling into negative territory, travel and leisure stocks’ drop of 2.5 percent resulted in a loss.
The European markets followed their Asia-Pacific counterparts, whose shares slid over 1 percent after OPEC and its allies announced a deal on July 18 i.e. Sunday to phase out 5.8 million barrels per day of oil production cuts by the month of September 2022 since the prices of the commodity reached their highest levels in more than two years. OPEC has stated that the coordinated increases in oil supply from the group (OPEC+) will begin in August.
This occurred after Brent Crude rose over 40 percent in the year so far with the increasing demand for crude as the global economy slowly recovers from the COVID-19 pandemic. The highly contagious Delta variant, which was first identified in India, has been a prime reason for the third wave currently being faced by several European nations.
In Europe, the destruction caused by Germany and Belgium’s floods can impact the region this week including the coronavirus crisis.