On Monday, the Organization of Petroleum Exporting Countries and Allies, or OPEC+, will convene. On Thursday, four OPEC+ sources indicated the group was considering going above and beyond a current agreement to add 400,000 barrels per day to supplies each month.
Beyond October, “a quicker ramp-up in OPEC+ output cannot be ruled out,” according to oil broker PVM’s Stephen Brennock. “The idea of oil at $80 is unappealing to the production group.”
At 1220 GMT, Brent crude lost $0.41, or 0.5 percent, to $77.90, putting it on track for a weekly loss following three weeks of increases. The price of US West Texas Intermediate (WTI) oil fell $0.69 to $74.34, although it is still on track for a sixth week of gains.
A strong US dollar and an increase in US crude inventories announced this week weighed on petroleum on Friday.P
Oil is more costly for holders of foreign currencies when the dollar is strong, and it tends to reflect weaker investor risk appetite.”
Despite this, Brent has increased by 50% this year, reaching a three-year high of $80.75 on Tuesday. Consumers such as the United States and India are pressuring OPEC+ to increase production in order to assist down prices.
According to Jeffrey Halley, an analyst at brokerage Oanda, the OPEC+ meeting on Monday might disappoint in terms of adding additional supply, noting certain members’ reluctance to expand output and the attractiveness of high prices to enhance earnings.
“Shorting oil is only for the brave with extremely deep funds, no matter how you cut it,” he added.
Oil is also gaining traction as power companies across the world switch away from natural gas due to rising natural gas prices. In Pakistan, Bangladesh, and the Middle East, generators have begun to switch fuels.