They, however, fear a need to limit oil output next year to balance global supply and demand as US crude supplies grow. Saudi Arabia and other producers have discussed the possibility of an increase of about 500,000 barrels per day between the Organization of the Petroleum Exporting Countries (OPEC) and its non-OPEC allies.

"Saudi Arabia will increase production by 200-300,000 bpd in September and October, above its 10.4 million bpd level in August, to meet additional demand from customers, particularly in Asia," sources familiar with Saudi production plans said.

Riyadh decided not to press for a formal increase at the moment as it realized that it would not get the approval of all the producers involved in the talks, some of whom lacked spare capacity and would not be able to boost production quickly, Sources reported.

Saudi Arabia, OPEC's biggest producer, was under new pressure last week from US President Donald Trump to cool oil prices ahead of a meeting in Algeria for a number of OPEC ministers and allies, including Russia. Saudi Arabia, the world's largest oil exporter, is the only major producer with spare capacity to supply supplies quickly, balancing supply and demand.

The sources said that if Iranian supplies are less than expected and prices continue to rise, OPEC and its allies could still agree to a formal increase in output next year, which will be discussed at the meeting scheduled for Dec. 6 and 7. The sources explained that the additional quantities and time frame of any increase would depend on producers' compliance with their current agreement in the coming months and  prospects in 2019.