2018.05.2502:15:00UTC+00Oil Prices Drop as Russia Warns of Gradual Output Rise

Oil prices eased on Friday as Russia hinted it may gradually raise output, after having withheld supplies in tandem with producer cartel OPEC since 2017.

Brent crude futures stood at $78.63 per barrel, down 16 cents from their previous close, and more than 2.2 percent below the $80.50 multi-year high they reached on May 17. Brent broke through $80 for the first time in more than three years earlier in May.

U.S. West Texas Intermediate crude futures were at $70.60 a barrel, down 11 cents from their last settlement.

The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) as well as a group of non-OPEC producers led by Russia started withholding output in 2017 to tighten the market and prop up prices.

However, Russia, in particular, has been floating a potential end to the production cuts, with energy minister Alexander Novak saying on that restrictions on oil production could be eased “softly” if OPEC and non-OPEC countries see the oil market balancing in June.

Nonetheless, the downside risk to oil prices could be limited by geopolitical factors.