OIL prices have plunged amid concerns about the outlook for the recovery after major exporters agreed to increase production.

Members of the Opec+ group, which includes Saudi Arabia and Russia, agreed at the weekend to increase output by 400,000 barrels per day.

The decision to open the production taps wider followed a strong rally in oil prices fuelled by hopes that coronavirus vaccines would secure a strong recovery from the damage caused by the pandemic.

The agreed increase in output represents the latest step in a gradual campaign to unwind deep cuts in production that were agreed after demand plunged last year after the coronavirus crisis erupted.

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However, while the move was expected it was made as fears mounted about the potential impact of the rapid spread of the Delta variant of the coronavirus around the world.

Stock markets fell sharply around the world yesterday. In London the FTSE-100 closed down 2.3 per cent, 163.7 points, at 6844.3.

Brent crude was down around 6%, $4.49 per barrel, at $69.10/bbl in afternoon trading.

The US benchmark rude, West Texas Intermediate, was down 7%, $4.89/bbl, at $66.92/bbl.

The movements will be regarded warily in the North Sea oil and gas industry, which has been hit hard amid the fallout from the pandemic.

Firms that operate fields slashed spending in response to the resulting fall in the Brent crude price, to less than $20/bbl in April last year. The price of WTI turned negative briefly that month after storage facilities came close to filling up.

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Sentiment started to recover after the 10m barrels per day production cuts agreed by Opec + took effect in May last year.

The rally gathered pace from November as vaccines were rolled out. The price of Brent crude rose above pre-pandemic levels. It peaked at $76.72/bbl earlier this month.

Opec+ members have agreed to add back around 4.2m barrels production daily in recent months.