Officials from OPEC, Russia and other oil-producing countries will meet Wednesday by video conference to decide how much oil to pump into the market as the pandemic continues to inject uncertainty into the global economy.
The meeting will be the first after an arduous series of negotiating sessions in July that led to a deal to increase production by 400,000 barrels a day in each of the coming months, adding around 2 percent to supplies by year end. The producers also resolved a dispute over production ceilings with the United Arab Emirates.
The agreement is subject to monthly review, but analysts say that there seems to be little reason for the 23-member group, known as OPEC Plus, to depart from the hard-won arrangement at this time. However, Prince Abdulaziz bin Salman, the Saudi oil minister who chairs the meetings, has shown a penchant for pulling off surprises.
Oil prices have risen through much of this year as pandemic lockdowns eased and economies began a boisterous expansion. Prices fell sharply after the July agreement, causing concern that the production increase was too much, but they have recovered to about $73 a barrel for Brent crude. Shutdowns in the Gulf of Mexico caused by Hurricane Ida as well as a large fire at a Mexican offshore facility have restricted supplies.
Analysts say that officials are growing increasingly worried about the spread of the highly infectious Delta variant of coronavirus and could dial back on production increases later in the year.
“We get the sense the group is going to stick with the planned quota increase” this month, said Richard Bronze, the head of geopolitics at Energy Aspects, a research firm. However, officials “will want to keep the option of pausing supply increases later in the year open,” he added.