LONDON – Oil fell to around $78 a barrel on Friday on the possibility that OPEC+ producers may increase production as planned to ease supply concerns, although crude this week hit a three-year high .
The Organization of Petroleum Exporting Countries and Allies, known as OPEC+, met on Monday. Four OPEC+ sources said on Thursday that the group was considering moving beyond the current deal to add 400,000 barrels per day to supply each month.
“Beyond October, a sharp increase in OPEC+ output cannot be ruled out,” said Stephen Brennock of oil broker PVM.
Brent crude fell 47 cents, or 0.5 percent, to $77.84 at 1015 GMT, turning a weekly decline after three weeks of gains. US West Texas Intermediate (WTI) fell 53 cents to $74.50, set for a sixth consecutive week of increase.
Crude also came under pressure from a strong US dollar on Friday and this week the US crude inventories registered an increase.
A stronger dollar makes oil more expensive for holders of other currencies and reflects a lower investor risk appetite.
Still, Brent is up 50 per cent this year and hit a three-year high of $80.75 on Tuesday. OPEC+ is facing pressure from consumers such as the United States and India to produce more to help drive down prices.
Brokerage OANDA analyst Jeffrey Haley said Monday’s OPEC+ meeting was likely to be disappointed in terms of adding more supply, citing the inability of some members to increase output and the appeal of higher prices to boost revenue.
“The way you cut it; Oil shortage is only for the brave with very deep pockets,” he said.
Oil is also gaining support as a jump in natural gas prices globally prompts power producers to move away from gas. Generators have started changing fuel in Pakistan, Bangladesh and the Middle East.
by Alex Lawler
This News Originally From – The Epoch Times