Oil Prices Edge Lower, Despite Increased Demand
Oil prices fell a third day on Friday as supply concerns continued to haunt the market, with OPEC likely to add more barrels amid expectations that demand is returning as more countries recover from the pandemic.
Brent crude was down 20 cents, or 0.3%, at $73.27 a barrel by 0018 GMT and is heading for a 3% decline this week after two days of heavy declines.
Discussions on supply policy within the Organization of the Petroleum Exporting Countries, Russia and other producers, a group called OPEC+, ended without agreement this month after the United Arab Emirates (UAE) objected to extending the output policy beyond April 2022.
Saudi Arabia and the UAE are now close to finalizing an agreement that would allow more supply into the market.
OPEC said on Thursday it expects world oil demand to increase next year to around levels seen before the pandemic, about 100 million barrels per day (BPD), led by demand growth in the U.S., China and India.
OPEC output in June increased by 590,000 BPD to 26.03 million BPD, the report showed.
“Output should rise further in July on the back of larger quotas, and we expect high prices to incentivize more production from the group even without a formal agreement to do so,” Capital Economics said in a note.