Oil prices slump as OPEC, Russia plan output boost

OPEC oil producers and Russian Federation are due to meet in Vienna on June 22 to discuss easing supply curbs that have helped drive world oil prices to $80 a barrel, raising gas prices and hurting big energy importers such as India.

Brent crude futures for July delivery fell $2.17 to $76.62 a barrel, a 2.8 percent loss, by 11:12 a.m. EDT (1512 GMT). The global benchmark lost about 2.7 percent this week, its largest weekly drop since early April. The contract hit its highest since late 2014 at $80.50 last week.

U.S. West Texas Intermediate (WTI) crude fell US$3.04 to US$67.67 a barrel, a 4.3 per cent loss. Following six weeks of gains, WTI was set to lose about 5.1 per cent for the week, which would be its biggest loss since early February.

The discount of WTI to Brent hit $8.45 on Friday, its widest since May 17, and not far off levels last seen three years ago.

Russian Federation and Saudi Arabia are the key movers behind a pact between OPEC and other producers that has limited production since 2017 but which experts fear may soon lead to a spike in prices.

Opec may decide to raise oil output as soon as June as Venezuelan output collapses, United States sanctions against Iran loom, and after Washington raised concerns that the oil rally was going too far, Opec and oil industry sources familiar with the discussions told Reuters.

OPEC's chief also said US President Trump had complained on Twitter about high oil prices, which had triggered to the countries' decision to increase output.

Global crude supplies have tightened sharply over the past year because of the OPEC-led cuts, which were boosted by a dramatic drop in Venezuelan production.

Oil's rally has accelerated in recent weeks on the potential for another supply reduction as sanctions could curb Iranian exports.

United States crude oil production has risen by more than a quarter in the past two years, to 10.73 million bpd.

The U.S. oil rig count, an indicator of future production, rose by 15 to 859 in the week to May 25, the highest level since March 2015, General Electric Co's (GE.N) Baker Hughes energy services firm said.

Hedge funds and other money managers raised their bullish bets on US crude futures and options in the latest week after four consecutive cuts in the net long position, according to data released on Friday.

Saudi Aramco's much-hyped initial public offering is "most likely" to take place in 2019, Saudi Energy Minister Khalid Al-Falih said on Friday, likely confirming that plans for the IPO have been pushed from this year to next.

"It's the last Friday before a long weekend and the volume has a tendency to go down and with lower volume there's always a chance of higher volatility", Rollingson said.

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