Oil fell below $70 a barrel in New York for the first time in two weeks as Saudi Arabia said it expects Opec and its partners to increase supplies later this year, easing some of the restraint they’ve shown since early 2017.

US futures fell as much as 2.1 per cent, set for the first weekly drop this month. There will likely be a gradual supply boost in the second half, Saudi Arabian Energy Minister Khalid Al Falih said in St. Petersburg, as Opec and its partners acknowledge consumer anxieties after prices reached a three-year high. The comments were echoed by his Russian counterpart, Alexander Novak.

“The size of the supply increase is still a question mark, but otherwise there can be no doubt anymore that Saudi Arabia and Russia will be increasing supplies in the second half,” said Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland.

Oil has been trading near a 3 1/2-year high on concern about the potential supply disruptions from Venezuela and Iran. The rally has sparked concern that demand may falter, and the Organisation of Petroleum Exporting Countries and its allies appear to be reacting, with the first offer to boost output since January 2017.

West Texas Intermediate for July delivery traded at $69.31 a barrel on the New York Mercantile Exchange, down $1.40, at 10:54am in London. The contract lost 1.6 per cent to $70.71 on Thursday. Prices have declined $1.99 this week. Total volume traded was about 52 per cent above the 100-day average.

Brent futures for July settlement traded at $77.04 a barrel on the London-based ICE Futures Europe exchange, down $1.75 and headed for a weekly drop for the first time in seven weeks. The global benchmark crude traded $7.81 above WTI for the same month, after closing at the biggest premium since April 2015 on Thursday.

Opec+ Talks

Futures for September delivery fell 1.6 per cent to 477.4 yuan a barrel in afternoon trading on the Shanghai International Energy Exchange. Prices are down 1.9 per cent this week. The contract rose 0.1 per cent to 485 yuan on Thursday.

Opec and its allies will discuss easing the curbs in June, Russian Energy Minister Alexander Novak said in a joint interview with Al Falih. The two producers plan to have at least two more meetings ahead of a group gathering in Vienna next month, the Saudi minister said in the interview early Friday in St. Petersburg.