Oil falls to $98 as OPEC considers raising output quotas
Oil fell to near $98 in New York on speculation OPEC may raise its crude output quotas at a meeting in Vienna.
Crude for July delivery fell 1.64% toward $98.02 on Wednesday before bouncing slightly. The Energy Information Administration reports its weekly supply data later Wednesday.
OPEC to raise production
OPEC was expected to raise crude production levels at a meeting on Wednesday, with several delegates following Saudi Arabia's lead in favoring a hike to lower high oil prices and protect demand in countries facing a global slowdown. The 11 OPEC members under production quotas are already exceeding them. Their output is an estimated 26.15 million barrels daily — about 1.3 million barrels above the daily overall OPEC production target of 24.85 million barrels a day agreed two years ago.
OPEC price hawks Iran and Venezuela came to the meeting opposing any move to increase output, which would likely lower prices from benchmark crude from the present levels of around $100 a barrel.
Mohammed bin Dhaen al-Hamli, the oil minister for the United Arab Emirates, spoke of "tight" supplies. OPEC oil ministers face a particularly complex mix of geopolitical and market tensions in their decision Wednesday.
OPEC President Mohammad Aliabadi of Iran spoke of a "nervous six months for the oil market."