OPEC and non-OPEC ministers concluded their meeting on Friday without a settlement, so they will meet again on Monday to discuss oil output strategy, as per CNBC.

On Friday afternoon, the energy alliance convened via videoconference to determine whether it should maintain the current production strategy or increase supplies further.

Except for the UAE, OPEC+ decided to ease cuts and extend them till the end of next year, as per Reuters, quoting an OPEC+ source. According to Reuters, the UAE stated the extension is subject to adjusting its baseline production.

OPEC+ delayed its ministerial meeting till Friday to undertake additional negotiations on oil output strategy, OPEC+ sources said on Thursday, after UAE vetoed a plan to ease cuts immediately and extend them until the end of 2022.

OPEC+ sources previously stated that the plan, on which leading OPEC+ producers Saudi Arabia and Russia had reached a preliminary agreement, had seen output grow by 0.4 million barrels per day (bpd) each month from August to December 2021 to satisfy rising global demand.

The market was taken aback by the impasse even though it had grown accustomed to OPEC+ agreeing on policy in a day or recent months, but some of the alliance's members are itching to generate more of their oil because current high prices imply big profits.

OPEC+ wants to produce additional oil as well – the idea yesterday was to increase output by 2 million bpd through the end of the year — but in a regulated and cautious manner, beginning with a prudent 400,000 bpd production increase in August.

When contrasted to the summer demand spike, a production boost of up to 500,000 bpd in August would be a very optimistic event.

OPEC+ is considering a gradual rise in production and is wary of resuming too much production too quickly, given the uncertainty surrounding the demand of the shoulder in the autumn season.

Potential vaccine delays, fresh lockdowns for certain parts of the world and unique strain break-outs are all generating some uncertainty about the timing of demand rebound, and OPEC+ has taken note.

Today, oil is trading slightly lower for the time being, as traders await the outcome of the prolonged OPEC+ meeting.

The previous day's gains were pared in late trade as the UAE sought to obstruct the deal, requesting a greater output limit to match the leniency shown to Russia and Iraq.

If the supply hawks get their way, the UAE's strong action would propel discussions in the days ahead, and the group has become more inclined to accept a higher output level, maybe even above the 1 million bpd threshold.

A rise of moreover half a million bpd might have a negative impact on prices, especially when paired with comparable supply increases from September, as traders will be concerned about the fall demand dynamics.

If such an increase of 500,000 to 1,000,000 bpd in August is contemplated, prices may suffer a small drop as a result.

If OPEC+ members cannot negotiate a deal and current output levels remain unchanged from August, oil prices will almost rise higher, creating a highly tight market and making the oil very costly during what should be a peak season for gasoline use.

Prices are swinging from gains to losses because of caution and optimism, and it'll be interesting to watch what happens after this eventful day!