There is a risk that traders are expecting a little bit too much heading into the meeting and could reshuffle their positions upon speculation that OPEC will not increase production to the amount now being priced in by the market between 500,000 to 1 million barrels a day.
The need to increase production emerged as Venezuela's production is in free fall and Iranian production is threatened by the re-imposition of US sanctions.
"Oil is down in a knee-jerk reaction to possibilities of a trade war intensifying between the U.S. and China, and OPEC's production increase breaking the demand and supply balance", Takayuki Nogami, chief economist at state-backed Japan Oil, Gas & Metals National Corp., said by phone from Tokyo.
If Russia also increases its production, that would be a breach of the cooperation agreement, Ardebili said. The rise in Oil price is due to the production cut in past few years by OPEC.
"There will be an OPEC conference in Vienna on 22 June.Whenever we have met OPEC members, we have told them that crude oil prices should be controlled, reasonable, responsible and should meet demand". "The Opec/non-Opec cartel is the big beneficiary of all this oil diplomacy, as it will squeeze global spare oil capacity and likely push up crude prices".
Greg McKenna, chief market strategist at futures brokerage AxiTrader said there would likely be oil price volatility in the week ahead of the meeting.
Meanwhile, Hindustan Petroleum Corporation Limited (HPCL) Chairman Mukesh K. Surana also said fuel prices may be lowered post the upcoming OPEC meeting. The amount of increased oil output that is being discussed in the framework of the OPEC + agreement is fully correlated with the decline made by Venezuela in the last 1.5 years.
Back in late 2016, OPEC famously announced production cuts in a desperate measure to reduce the volume of oversupply in the market, the major catalyst behind oil falling from above $110 to below $30 between mid-2014 and early 2016.
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That was still down $1.23, or 1.9 percent, from their last settlement.
Escalating trade tensions between the US and China were also weighing on global markets including oil, said John Kilduff, partner at energy hedge fund Again Capital LLC in NY.
Oil analysts were expecting oil prices to touch $100 a barrel mark after Trump imposed fresh sanctions on Iran.
The oil ministers of the OPEC cartel are arriving in Vienna to discuss this week whether to increase production of crude oil and help ease the price of global energy.
China on Friday said it would retaliate by slapping duties on American export products, including crude oil.
Tankers waiting to load more than 24 million barrels of crude, nearly as much as state producer PDVSA shipped in April, are sitting off the Opec member's main oil port.
U.S. crude exports to China have been rising sharply, thanks to a production surge in the past three years that was a welcome alternative to make up for the cut in supplies from Opec and Russian Federation. If US oil finds it hard to enter China, it would try to find a way to sell in India, the other main consumer.