Oil price upside is limited! The OPEC+ meeting is coming, or steps are taken to gradually increase supply

Oil market analysts do not expect OPEC+ and its allies to agree to a sharp increase in output in September on Wednesday, but members may take steps to gradually increase supply
.

Robert Yawger, executive director of Mizuho Energy Futures, said in a note: "In my view, OPEC+ has the potential to launch a program to increase production across the organization and eliminate individual quotas
for member countries.
Yawger said the removal of quotas would allow Gulf countries with spare capacity such as Saudi Arabia, the United Arab Emirates and Kuwait to increase production, while producers such as Nigeria, Algeria and Angola would produce below their quotas
.

Such an outcome would also cater to U.
S.
President Joe Biden's request to OPEC+ to increase production, giving Biden the opportunity to claim that his July trip to Saudi Arabia was not in vain
, he said.

Biden visited Saudi Arabia last month, clashing fists with Crown Prince Mohammedbin Salman
.
The White House approved the release of an intelligence report in 2021 that claimed the crown prince ordered an operation
that led to journalist Jamal Khashoggi's death in 2018.

During his visit, Biden said he was doing everything he could to increase energy supplies to the United States, and that Saudi Arabia "has the same urgency
.
" Biden added that he expects to see further measures
"in the coming weeks.
"

In a deal that expires at the end of August, OPEC+ has been increasing its production target on a monthly basis, lifting production cuts
imposed after the outbreak.
However, some OPEC+ members have struggled to meet the requirements for
increased production.
The group met Wednesday to decide on its next move
.

Vikas Dwivedi, global oil and gas strategist at Macquarie Group, said OPEC+ is unlikely to make any major moves
.
OPEC+ last month cut its estimate of the global oil surplus to 800,000 barrels
per day.
He said another round of outbreaks or problems in any producing region could result in an oil surplus well above or below the baseline OPEC+ assumed ahead of Wednesday's meeting, a prospect that could make members reluctant to change the status quo
.

Helima Croft, head of global commodity strategy at RBCCapitalMarkets, said in a note that although Biden's visit to Saudi Arabia did not immediately boost production growth, Riyadh may continue to gradually increase production in return
.

"Despite claims by some media commentators that the president returned to Washington empty-handed, we believe it is clear to the White House that Saudi Arabia will work within the framework of OPEC+ and will not take unilateral action
while the current agreement remains in effect through the end of the year," he wrote.
However, given the expected incremental increase in production, failure to add more production to the market will undoubtedly be seen as a major disappointment
by Washington.
”

At the same time, the White House may also recognize that Riyadh is worried about depleting its remaining spare capacity
amid a lot of uncertainty about the production outlook for oil producers such as Russia and Libya.
Therefore, it is likely that the Biden administration did not expect a significant increase
in supply.

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