Oil falls amid prospects of boosting production

Oil falls amid prospects of boosting production
Oil falls amid prospects of boosting production

Oil prices fell on Friday amid prospects that the OPEC + alliance would boost a planned production increase in order to ease supply concerns, while rising gas prices spurred some electricity producers to switch from gas to oil.

Brent crude futures fell 12 cents, or 0.2%, to $78.19 a barrel by 0638 GMT, but it is still heading towards achieving a small increase in the week, to achieve 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 +, next Monday, where producers will discuss whether to exceed their current agreement 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, the Joe Biden administration’s concern about rising 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 the rise in natural gas prices globally, electricity producers are switching to fuel oil or diesel instead of gas, which pushes oil prices to rise. 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 a tighter-than-expected market through the end of the year,” ING commodity analysts said in a note.

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