US optimism on OPEC+ hike set to end in disappointment - delegates

Quantum Commodity Intelligence - US officials hoping for a "positive announcement" when OPEC+ meets next week are set to be left disappointed, with the informal Reuters poll of delegates suggesting the group is planning at the most only a modest hike in September output.

According to the poll, two of the OPEC+ sources said that a modest increase for September would be discussed. Five indicated that the group would likely keep September production targets in line with August, with the group having largely restored the 9.7 million bpd of Covid-related cuts after next month's increase, at least on paper.

US reports on Thursday had flagged optimism over a positive announcement, a senior administration official said, indicating hopes for a significant increase.

The official told Washington reporters this was based on conversations during President Joe Biden's bilateral and multilateral meetings on his recent visit to Saudi Arabia, but that "these are decisions that OPEC members have to make and we respect that process".

"We are optimistic based on the conversations we had about this next OPEC+ meeting," the official, who declined to be named, told reporters.

"We think that, obviously, additional supply would certainly help even further stabilise the market and potentially bring prices down."

At its previous meeting in late June, OPEC+ ratified previously announced plans to increase output quotas by a combined 648,000 bpd in August, which brings nameplate OPEC+ output close to levels before the record 9.7 million bpd cut in 2020.

However, according to the group's own figures, output came in 2.84 million bpd below its collective June production target, with compliance at a record 320%.

OPEC's Joint Technical Committee meeting will meet next Tuesday, with the Joint Ministerial Monitoring Committee meeting scheduled for Wednesday at 1300 Vienna time. The full OPEC+ Ministerial meeting will follow immediately after the JMMC.

The meeting marks a new chapter for the alliance, with the existing deal expiring at the end of August. Even though only Saudi Arabia and the UAE are believed to have immediate spare capacity, OPEC+ is expected to continue its regular dialogue.