OPEC and allies to decide on crude production policy as oil prices climb, demand recovers

CNBC reports that a group of some of the world’s most powerful oil producers will meet on Thursday to decide the next phase of their production policy.

OPEC and non-OPEC partners, an energy alliance often referred to as OPEC+, will convene via videoconference at 2 p.m. London time.

The meeting comes at a time when OPEC+ is relatively upbeat about improved market conditions and the outlook for fuel demand growth following a sharp rebound in oil prices over the first six months of the year.

Analysts say the most probable outcome is for an increase of around 500,000 barrels per day in August.

Chris Midgley, global head of analytics at S&P Global Platts, told that OPEC kingpin Saudi Arabia would likely maintain a “cautious” approach to production policy. This is because Riyadh would prefer to see global demand increase before adding supply and remains concerned about when Iranian oil could return to the market, he said.

“OPEC is treading a tight rope to sustain more attractive prices without hurting consumer confidence while not adding too much supply ahead of the weaker Autumn shoulder period for demand,” Midgley said.