Saudi Arabia will this week push the Organization of Petroleum Exporting Countries (OPEC) to cut production by up to 1.5 million barrels a day to help re-balance the market and lift oil prices from their four-year lows, analysts and strategists told CNBC.
Nineteen out of 30 market professionals contacted by CNBC say OPEC’s leading member Saudi Arabia will spearhead an agreement to cut supply at its November 27 meeting.
“Only a 1.5 million barrel-a-day reduction would help stabilize the price at this stage,” Ole Sloth Hansen, head of commodity strategy at Saxo Bank, told CNBC.
“If no action is taken the market will see this as a renewed selling opportunity.”
Still, persuading producers outside the Gulf to share the burden of production cuts will prove a tough sell — even for the Kingdom’s seasoned and influential oil minister Ali Al-Naimi.
“The market is now asking the Saudis to show how much control they really do have within OPEC,” said Carl Larry, President of Houston-based consultancy Oil Outlooks and Opinions.
Nonetheless, 11 out of 30 strategists polled by CNBC believe OPEC won’t take any action this Thursday, possibly deferring a decision to early next year.
“It’s hard to imagine any significant cut,” said Daniel Yergin, vice-chairman of IHS CERA and the Pulitzer-Prize winning author of ‘The Prize: The Epic Quest for Oil, Money, and Power.’