Oil fell on Monday ahead of an OPEC+ supply policy meeting that may decide whether a recent rally in prices can be sustained as the world fitfully recovers from the Covid-19 pandemic. Brent crude was down 24 cents or 0.3% at $79.04 per barrel by 0143 GMT. It rose 1.5% last week, its fourth weekly gain in a row. U.S. oil dropped by 27 cents or 0.4% to $75.61, after rising for the past six weeks. Oil prices have risen amid 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 are focused on the upcoming OPEC+ meeting,” ANZ Research said in a note. OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, is scheduled to meet later in the day.
The group is facing pressure from some countries to produce more to help lower prices as demand has recovered faster than expected in certain parts of the world. OPEC+ agreed in July to boost output by 400,000 barrels per day every month until at least April 2022 to phase out 5.8 million bpd of existing cuts. But four OPEC+ sources told Reuters recently that producers were considering adding more than that deal envisaged. The earliest any increase would take place would be November since OPEC+’s last meeting has decided October volumes. The oil price rally has also been fueled by an even bigger increase in gas prices that have spiked 300% and are trading around $200 per barrel in comparable terms, prompting switching to fuel oil and other crude products for generating electricity and other industrial needs.