LONDON, Oct 4, 2021 (BSS/AFP) - OPEC and its key allies will meet on

Monday to decide whether to ramp up oil production in a bid to calm
overheated global energy prices.

   The market landscape has changed little since the previous September 1
meeting of the oil exporters' cartel and its allies, together known as OPEC+,
with demand continuing to weigh on global crude supply.

   Oil prices jumped above $80 last week for the first time in almost three
years, handing the club, led by Saudi Arabia and Russia, both a boost and a
dilemma.

   The 23 countries in the group are expected to start their video conference
meeting at 1300 GMT (3 pm local time at OPEC's Vienna headquarters).

   While higher prices benefit producers in the form of increased exports and
revenues, there are medium-term drawbacks if rising prices stifle the fragile
post-pandemic economic recovery.

   The trend could also encourage new competitors into the market, making the
exploration of new fields more profitable or even encouraging the trend
towards renewables.

   OPEC has been sticking to an increase in production of 400,000 barrels per
day (bpd), agreed in July, but could nonetheless be tempted to open the taps
further.

   US President Joe Biden's administration urged such an approach in August,
when National Security Advisor Jake Sullivan said the cartel was not doing
"enough" to boost oil production.

   Helima Croft, of RBC Capital Markets, predicted in a meeting preview note
that the bloc will "come under increasingly intense pressure from Washington
to open the production release valve and cap the upside".

   "With Europe and China in the throes of an escalating energy crisis, we
think the odds are rising that the producer group will revisit their original
tapering timeline and move to accelerate their output return," she wrote.

   - Willing and able -

   In a study published last week, Morgan Stanley analysts noted the
possibility of "demand destruction" if oil prices creep over $80 a barrel.

   Iraq's oil minister has told the country's state news agency the group is
working towards keeping prices around $70.

   However, in the current market, Goldman Sachs sees Brent crude oil soaring
towards $90 within months.

   To calm overheating prices, Opec+ countries could opt to increase supply
volumes, but there are questions over their willingness -- not to mention
ability -- to do this.

   Nigeria, Angola and Libya "continue to face their perennial
infrastructure, investment, and security challenges", according to Croft.

   Tamas Varga, an analyst at PVM Oil Associates, added: "Delayed maintenance
works and lack of investment, partly due to the health crisis and partly
because of the transition from fossil fuel to renewable energy, are to blame
for these failures".

   OPEC Secretary General Mohammed Barkindo gave mixed signals while speaking
on the sidelines of a technical meeting on Wednesday.

   He said OPEC's strategies "have helped eliminate the market's stock
overhang" but at the same time recognised the "need for incremental increases
to address demand".