© Reuters. Oil falls on prospects that OPEC+ will boost production
It fell on Friday amid prospects that the OPEC+ alliance would boost a planned production increase aimed at easing supply concerns, while rising gas prices spurred some electricity (SE:) (SE:) producers to switch from gas to oil.
Crude futures fell 12 cents, or 0.2 percent, to 78.19 a barrel, but they are still heading towards achieving a small increase in the week, achieving gains for the fourth consecutive week.
US West Texas Intermediate crude futures fell 15 cents to $74.88 a barrel, but the contract is still on track to make gains for the sixth consecutive week.
All eyes are on the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, the group known as OPEC+, on Monday where producers will discuss whether to exceed their current deal to boost production by 400,000 barrels per day in November and December.
Four OPEC sources said adding more oil was a scenario being considered, without elaborating on quantities or timing, as oil hovered near a three-year high and consumers pushed for more supplies.
Consulting Energy Aspects expects OPEC + to extend its decision to increase production by 400,000 barrels per day each month between August and December.
Virendra Chauhan said Brent would need to hold above $80 to turn that around.
In the United States, US President Joe Biden’s administration’s concern about high oil prices was on the agenda of a meeting between US National Security Adviser Jake Sullivan and Saudi Crown Prince Mohammed bin Salman earlier this week, White House spokeswoman Jen Psaki said.
With global prices rising, electricity producers are turning to fuel oil or diesel instead of gas, driving up oil prices. Power plants in Pakistan, Bangladesh and the Middle East are already changing fuels.
“This indicates that we will see strong demand for oil in the coming months, which means that the oil market will experience tighter-than-expected tightening through the end of the year,” ING commodity analysts said in a note.
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