Oil was down Monday morning in Asia, with the Organization of the Petroleum Exporting Countries and allies (OPEC+) due to meet for its supply policy meeting where it could decide whether a recent rally in prices is viable.
Brent oil futures were down 0.28% to $79.06 by 10:50 PM ET (2:50 AM GMT) and WTI futures were down 0.32% to $75.64. Brent futures hit an almost three-year high above the $80 mark last week as a global energy crunch and recovering fuel demand gave the black liquid a boost.
With OPEC+ due to meet later in the day, risk appetite has been “boosted by growing confidence in a strong pick up in global growth… as investors are focused on the upcoming OPEC+ meeting”, ANZ Research analysts said in a note.
Several countries are pressuring the cartel to increase production and lower prices as fuel demand continues to recover. OPEC+ in July 2021 agreed to boost output by 400,000 barrels per day every month until at least April 2022, in order to phase out 5.8 million bpd of existing cuts.
Producers are considering adding more supply than laid out in the OPEC+ deal, OPEC sources told Reuters. However, any increase will take effect from November as October’s volumes were already decided at the last OPEC+ meeting in September.
Soaring gas prices, which have increased 300% and are trading around $200 per barrel in comparable terms, capped some of oil’s losses. The increase also led users to switch to fuel oil and other crude products in order to generate electricity as well as other industrial needs.