Oil prices drop as OPEC+ weighs another output hike

Oil prices fell by about 2% on Wednesday ahead of a weekend meeting of OPEC+ producers that is expected to consider another increase in production targets in October.

Brent crude fell $1.17, or 1.69%, to $67.97 a barrel by 12:16 p.m. EDT (1616 GMT). U.S. West Texas Intermediate crude fell $1.21, or 1.84%, to $64.38 a barrel.

Eight members of the Organization of the Petroleum Exporting Countries and allies - known as OPEC+ - will consider further raising oil production at a meeting on Sunday, two sources familiar with the discussions told Reuters, as the group seeks to regain market share.

The prospect of OPEC+ raising oil production has increased ahead of the meeting, said Phil Flynn, senior analyst with Price Futures Group. Traders had expected the group to stay the course.

Another boost would mean that OPEC+, which pumps about half of the world's oil, would be starting to unwind a second layer of output cuts of about 1.65 million barrels per day, or 1.6% of world demand, more than a year ahead of schedule.

The group had already agreed to raise output targets by about 2.2 million bpd from April to September, in addition to a 300,000 bpd quota increase for the United Arab Emirates.