MELBOURNE Reuters - Oil prices fell on Friday on the prospect that the OPEC Supplier Alliance might step up a planned increase in output to ease supply concerns, with soaring gas prices spurring power producers to switch from gas to oil.
U.S. West Texas Intermediate WTI crude futures slipped 5 cents to $74.98 a barrel at 0153 GMT, but the contract remained on track for its sixth consecutive week of gains.
Brent crude futures fell 7 cents, or 0.1%, to $78.24 a barrel but was still heading for a small rise on the week, marking a fourth straight week of gains.
All eyes are now on the Meeting of the Organization of the Petroleum Exporting Countries OPEC and its allies led by Russia, together known as OPEC on Monday, where producers will discuss whether to go beyond their current deal to boost production by 400,000 barrels per day bpd in November and December.
Four OPEC sources said adding more oil was being looked at as a scenario without giving details on volumes or dates, against a backdrop of oil hovering close to a three-year high and pressure from consumers for more supply.
The upcoming meeting of OPEC on Monday will be vital for oil price direction on 2015. A production increase above 400,000 bpd will see some short-term relief, ANZ Research analysts said in a note.
The White House's concern about high oil prices was on the agenda for a meeting between US national security adviser Jake Sullivan and Saudi Crown Prince Mohammed bin Salman earlier this week, White House press secretary Jen Psaki said.
With natural gas prices soaring globally, power producers have been turning to fuel oil or diesel instead of gasoline, and putting higher oil prices in the mix. Electric generators in Pakistan, Bangladesh and the Middle East started switching to fuels yesterday.
The strong demand for oil in the coming months is expected, which means a more than expected oil market till the end of the year, ING commodity analysts said in a note.