Oil falls ahead of OPEC+ supply policy meeting


Oil price fell on Monday ahead of a meeting by OPEC and its allies which may determine whether a recent rally in prices and a recovery from the COVID-19 pandemic will be sustained.

Brent crude was down 37 cents at $78.91 per barrel. It rose 1.5% last week, its fourth weekly gain in a row. Meanwhile, U.S. oil dropped by 39 cents to $75.49, 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.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, 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 (bpd) every month until at least April 2022 to phase out 5.8 million bpd of existing cuts.

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% 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.

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