Prices fall as higher oil supply on cards

OIL PRICES fell on Friday ahead of an OPEC meeting in Vienna next week as two of the world’s biggest producers, Saudi Arabia and Russia, indicated they were prepared to increase output.

Benchmark Brent crude oil fell by $1.07 a barrel to a low of $74.87 before recovering to $75.12, down 82 cents. US light crude was 360 cents lower at $66.53.

Both contracts hit three-anda-half year highs in May, but have since drifted lower as US crude production has risen and as the Organization of the Petroleum Exporting Countries, Russia and other allies look poised to increase output in their meeting in the Austrian capital on June 2223.

Russian Energy Minister Alexander Novak said talks with Saudi Energy Minister Khalid al-Falih in Moscow that both nations “in principle” supported a gradual increase in production after restricting output for 18 months.

“We in general support this... but specifics we will discuss with the ministers in a week,” Novak said, adding that one option would involve gradually raising output by 1.5 million barrels per day (bpd), possibly starting from July 1.

Falih offered no specific guidance on what any deal in Vienna could look like, but said: “We will see where we go, but I think we’ll come to an agreement that satisfies, most importantly, the market.”