OPEC+ meeting: Additional supply increase unlikely

OPEC+ are due to meet on Thursday. An additional supply increase appears unlikely even though oil prices trade around multi-year highs.

Energy 3

When is the OPEC+ meeting?

The OPEC+ group are due to meet on Thursday 4th November

What to expect?

The group is set to decide whether to stick with the current supply output increase of 400,000 barrels per day, agreed in July. Or whether to increase supply at a quicker rate a move which would please many leaders, including US President Joe Biden, who have called for more supply to cool prices.

Oil prices have surged across the year and across the past quarter, hitting multi year highs as demand from economies reopening has ramped up. Additionally, surging gas and coal prices have made oil a comparatively cheap alternative for power generation increasing demand for oil further.

Yet as demand ramp up the supply side remains tight.

What OPEC+ members are saying?

The latest commentary from a Kuwait and Iraq suggests that they support sticking to the previously agreed plan, despite demand clearly outstripping demand. These comments come following heavy weight Saudi Arabia already dismissing call for additional oil supply.

In light of recent commentary, the broad expectation is that OPEC+ will stick to the previously agreed output plan. This is also likely following OPEC reducing its oil deficit projections for the fourth quarter to 300,000 bpd. This is much smaller than the 1.1 million bpd initially forecast. This revision is likely to support a more cautious approach.

Struggling to ramp up production

The meeting comes as some countries in OPEC+ have failed to ramp up production to the quotas permitted in October. OPEC undershot the planned rise of 254,000 bpd achieving a rise of just 190,000.

With OPEC+ seeming keen to remain behind the demand curve oil prices could well advance further. Iran is the wildcard. Iran is holding talks with the West regarding its nuclear programme. A deal could see Iranian oil flooding back to the market as US sanctions are removed. Whilst this is a possibility and could weigh on prices, the reality is that this won’t be an overnight occurrence.

Learn more about trading oil

Where next for WTI?

WTI crude oil continues to trade within the ascending channel dating back to mid-August. After running into resistance at 85.10, the 7 year high the price has softened slightly and the RSI has pulled back from overbought territory. It would take a move below 80.30 the low Oct 28 for bullish bias to be replaced with a bearish bias. Meanwhile buyers could look for a move back over 85.26 for fresh multi year highs.

Oil chart


How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account