OPEC meets in Vienna on November 30
Indications are that OPEC members are struggling to come to a consensus on extending quotas through 2018. Last week oil hit a two year high but the failure to come to an agreement may rapidly unwind the progress.
Here are views from a handful of firms:
Prices, time spreads and hedge fund positioning all reflect a high probability that a 9-month extension is adopted at the Nov. 30 meeting... With the rhetoric not matching the logic for the first time in years, we believe that the outcome of this meeting is much more uncertain than usual"
"We believe that oil prices have overshot fundamentals and that price risks are skewed to the downside into Thursday's meeting."
"Our expectation is that something short of a nine-month extension is delivered, likely either a shorter extension or a deferral of the decision until 1Q18"
They believe Saudi Arabia and Russia don't agree yet on extending the output cut through 2018.
"Based on the early readings of the OPEC meeting, and statements from Russia's oil minister, it looks as if an agreement to extend to end-2018 is nearly concluded after talks ahead of the full session"
Global oil supply is projected to rise 1.8m b/d if existing production-cut agreement by OPEC and co-operating non-OPEC producers is extended through end-2018 but if the curbs end, supply would rise 2.4m b/d y/y.