Brent slips close to $73 as Opec nears production agreement

Futures in London for August delivery drop 1.9%

Brent crude oil fell to near $73 (Dh268) a barrel as Opec and its allies inched closer to reaching an agreement on relaxing output curbs at a meeting in Vienna this week.

Futures in London for August delivery dropped 1.9 per cent. Saudi Arabia’s energy minister said the group needs to release more oil to the market, while his Iranian counterpart — who earlier in the week rejected any proposal to boost output — said he was optimistic about the outcome of Opec’s meeting today.

Brent’s premium to West Texas Intermediate narrowed to its smallest level in three weeks as the drop in the global benchmark outpaced those in US futures.

Brent futures for August settlement fell as low as $1.76 to $72.98 a barrel before trading at $73.32 at 11:07am in London on the ICE Futures Europe exchange. Total volume traded was about double the 100-day average. West Texas Intermediate crude for August delivery traded at $64.59 a barrel on the New York Mercantile Exchange, down $1.12. The US benchmark traded at an $8.74 discount to Brent, having earlier narrowed as tight as $8.45, the smallest since May 30.

Iran is showing signs of wavering on its opposition to a supply increase. Oil Minister Bijan Namdar Zanganeh said he was optimistic about Opec’s gathering, after speaking with several counterparts as well as Russian Energy Minister Alexander Novak on Wednesday.