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Oil prices fall further amid expected output increase

Oil prices continued to drop on May 28 as Saudi Arabia and Russia may increase supplies in an attempt to contain soaring prices that hit $80 last week.

Brent crude futures were down 1.11% to $75.59 a barrel at 12:43 p.m. ET, while U.S. West Texas Intermediate futures dropped 1.84% to $66.63 a barrel. As of 11:05 a.m. ET, the July Brent contract traded as low as $74.49 per barrel and the July WTI contract traded as low as $65.80 per barrel.

Oil prices dropped more than 3% on May 25.

OPEC and other producers led by Russia began cutting 1.8 million barrels per day of supplies in 2017 to stop prices from falling further, after prices plunged to less than $30 a barrel in 2016. Saudi Arabia is the de facto leader of OPEC.

The cuts moved prices beyond $80 a barrel for the first time since 2014, triggering concerns that it may hinder economic growth and increase inflation.

OPEC and Russia are considering boosting oil output by up to 1 million barrels per day, due to be finalized next month in Vienna, according to a May 25 Financial Times report. Russia's energy minister, Alexander Novak, said May 26 that oil production could return to levels that were in place in October 2016.

A May 25 Bloomberg report quoted Saudi Arabian Energy Minister Khalid Al-Falih as saying that lifting oil production may begin in the second half, with Novak saying the output increase may begin in the third quarter.

The potential boost in production is believed to fill in the potential gap from lost supply from Venezuela and Iran once U.S. sanctions are imposed, the Financial Times reported.