The Upcoming OPEC + Meeting May Affect The Oil Market
Investors remain focused on the upcoming OPEC + meeting and the recovery of production in the Gulf of Mexico after Hurricane Ida. From the OPEC + meeting, scheduled for September 1, 2021, the market expects a decision on the refusal or less increase in production than envisaged by the July decision.
OPEC + has been increasing production by 400 thousand barrels per day per month since August 2021 until 5.8 million barrels per day of oil is fully returned to the market, approximately in September 2021. Earlier, the Minister of Oil of Kuwait MA al-Fares hinted that the decision to increase oil production by 400 thousand barrels per day next month could be revised.
Investors are keen to gauge the OPEC + sentiment and the alliance's reaction to the fact that oil demand will not recover as quickly as expected. OPEC + meeting on September 1 is a significant factor for oil prices. The alliance has already stated that it may postpone the increase in production by 0.4 million barrels per day, because the pandemic continues to weigh on demand.
The analysts predict, that if the cartel makes such a decision, it will lead to an increase in quotations in the range of USD 74-78 per barrel in the short term. Because of Hurricane Ida, which struck the southern coast of the United States on Sunday, American companies cut their oil and gas production in the Gulf of Mexico by 91% and 84%, respectively. On Monday, the hurricane eased to a tropical storm and continues to subside.