Oil drops ahead of OPEC + supply policy meeting

TOKYO, Oct. 4 (Reuters) – Oil fell on Monday ahead of an OPEC + sourcing policy meeting that could decide whether a recent price rally can be sustained as the world recovers from the COVID pandemic 19.

Brent crude was down 24 cents or 0.3% to $ 79.04 a barrel at 1:43 a.m. GMT. It rose 1.5% last week, its fourth consecutive weekly gain. US oil fell 27 cents or 0.4% to $ 75.61, after rising in the past six weeks.

Oil prices have risen amidst supply disruptions and recovering global demand, pushing Brent last week to an almost three-year high above $ 80.

Risk appetite has been “boosted by growing confidence in a strong pick-up in global growth … as investors focus on the next OPEC + meeting,” ANZ Research said in a note.

OPEC +, which brings together the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, is due to meet later today.

The group is facing pressure from some countries to produce more to help lower prices as demand has picked up faster than expected in some parts of the world.

OPEC + agreed in July to increase production by 400,000 barrels per day each month until at least April 2022 to phase out 5.8 million barrels per day from existing cuts. But four OPEC + sources recently told Reuters that producers plan to add more than this deal envisioned. Read more

The first increase would take place in November, as the last OPEC + meeting decided on October volumes.

The rise in oil prices has also been fueled by an even larger increase in gas prices which have climbed 300% and are trading around $ 200 a barrel in comparable terms, prompting a switch to oil and d ‘other raw products to generate electricity and other industrial needs.

Reporting by Aaron Sheldrick; Editing by Himani Sarkar

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