Oil prices fell on Thursday, extending losses as investors braced for increased supplies after a compromise deal between leading OPEC producers and as U.S. fuel stocks rose, raising concerns over demand in the worlds largest consumer.

Brent crude dropped 52 cents, or 0.7, to 74.24 a barrel by 0850 GMT and U.S. West Texas Intermediate WTI crude was down 72 cents, or 1, at 72.41.

Both benchmarks slid more than 2 on Wednesday after Reuters reported that Saudi Arabia and the United Arab Emirates UAE had reached a compromise that should pave the way for a deal to supply more crude to a tight oil market and cool soaring prices.

The market is not taking any chances. Prices are very overbought anyway, so traders might want to take some money off the table before the deal is concrete, said Avtar Sandu, senior commodity trader at Phillips Futures in Singapore.

Talks among the Organization of the Petroleum Exporting Countries OPEC and allies including Russia, a group known as OPEC, had broken down this month after the UAE objected to an extension to the groups supply pact beyond April 2022.

However, analysts at Goldman Sachs, Citi and UBS expect supplies to remain tight in the coming months even if OPEC finalises an agreement to raise output.

With the oil market already in deficit and demand growth outpacing supply growth, the crude market will likely tighten further this summer, said UBS analyst Giovanni Staunovo.

We believe ongoing declines in global oil inventories could…