A deal is coming

The oil traders spotlight is firmly on Algiers

The poor old International Energy Forum has been overshadowed by the sideline OPEC meeting. The actual forum starts today but all traders are really interested in is the OPEC and non-OPEC chatter about production deals that may arise out of secondary meetings between producers on Wednesday.

Algeria has tried to keep things on track by saying that anything can and may happen at the gathering. Given all the deal, no deal headlines we heard last week, that might be wishful thinking, as it usually is from the smaller producers.

Is there going to be a production deal soon?

Yes. There will be a deal coming soon. Will an outright deal come this week in Algiers? That's doubtful but we could well get the makings of a deal this week. We already know that the big boys are open to a deal but not until they're pumping at full pelt, which will sort of defeat the object really. You don't balance the market by pumping far more than demand and then lock the taps in open mode. Iran is getting closer to the 4mbpd production levels they want and the Saudi/Russia Doha freeze had more holes than Swiss cheese but shows some willingness to do something. A deal may still be some way off but it's getting closer, maybe weeks at most.

Any deal that comes is going to be virtually ineffective until demand catches up to bite into supply, and that could be years away. In the meantime these clowns can't keep their word or a deal in place for 5 minutes.

At the end of the day, any news that signals a deal is going to be signed, sealed an delivered will boost the price of oil. After that, the supply/demand dynamics will still be there for all to see, and will be the true driver of prices long-term. If you're trading the black stuff, keep that in mind and be prepared for some choppy and volatile conditions in oil markets for the next three days at least.

Here's a link to the full IEF agenda and what I think may be possible key speeches within it (times are GMT+1)

Today - Just folks turning up fluff - possibly some doorstep comments

Tuesday 27th

  • 09.00-09.30 Opening comments from IEF and Algeria's PM

  • 10.00- 10.45 Panel, speeches and discussions from OPEC gen sec & major energy ministers
  • 11.55-12.25 Iraq oil minister is among discussants including various government state and energy ministers (UK, Japan)

Wednesday 28th

  • 11.00 - 12.30 Saudi vice minister for energy and ministers from Nigeria, Japan, India

  • 12.30-13.30 Algeria minister of energy - plenary session closing remarks, then press conference with IEF sec gen

Those items are just where the various potential market movers might make some headlines officially. All that won't account for any other sideline comments. I believe the OPEC mob will be having their meeting after the IEF wrap up on the Wednesday.

Deal or no deal moves to Algeria