OPEC and its allies are likely to stick to their existing agreement to add 400,000 barrels per day (bpd) of oil to the market in November, three OPEC+ sources said on Monday, despite pressure from consumers to cool a red hot market.
Ministers from The Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+, are due to gather online at 1300 GMT.
An OPEC+ ministerial panel that monitors market developments, known as JMMC, meets before that.
Brent crude was down 14 cents or 0.2 percent at $79.14 per barrel in earlier trading. It rose 1.5 percent last week, its fourth weekly gain in a row. U.S. oil dropped by 15 cents or 0.2 percent to $75.73, after gaining for the past six weeks.
Oil prices have risen due to the supply disruptions and a rise in global demand, pushing Brent last week above $80 to a near three-year high.
Risk appetite has been “boosted by growing confidence in a strong pick up in global growth,” ANZ Research said in a note, but added that investors were now focused on the OPEC+ meeting due later on Monday.
OPEC+ agreed in July to boost output by 400,000 barrels per day (bpd) every month until at least April 2022 to phase out 5.8 million bpd of existing cuts. 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 the previous OPEC+ meeting decided October volumes.
The oil price rally has also been fuelled by an even bigger increase in gas prices that have spiked 300 percent and are trading around $200 per barrel in comparable terms, prompting switching to fuel oil and other crude products to generate electricity and for other industrial needs.
“The uneven nature of the post-pandemic recovery will keep demand-side uncertainties in play, giving rise to oil price volatility,” Fitch Solutions said in a note.
OPEC+ technical committee sees slightly smaller surplus in 2022 OPEC’s Barkindo expects oil demand to continue upward pace beyond 2021