Oil prices fell on June 21 as producers prepared to discuss the lifting of production cuts at the biannual OPEC meeting on June 22 in Vienna, Reuters reported.
Benchmark Brent crude fell more than 2% to a low of $72.98 before recovering to $73.34 by 0945 GMT. US light crude was $1.00 lower at $64.71.
Prices fell after news broke that Saudi Arabia and Russia will propose an increase in production at the upcoming OPEC meeting.
Iraq, Venezuela, and Algeria have all expressed their opposition to such a move.
Iran was previously against any production changes, but now has indicated it may support a small increase.
“We need to release supply to the market,” Saudi Arabian energy minister Khalid al-Falih told reporters in Vienna.
“Oil demand usually grows at the steepest pace in the third quarter … We could face a deficit if we don’t take measures,” Russian energy minister Alexander Novak said on June 19. “In our view, this could lead to market overheating.”
Novak stated that Russia wants the coalition of OPEC and non-OPEC producers to raise production by 1.5 million barrels per day, essentially eliminating the OPEC-sanctioned output cuts of 1.8 million b/d in place since January 2017.
Brent reached three-and-a-half-year highs in May as concerns mounted over falling supplies.