Oil producers are unlikely to settle on any kind of deal in Algeria this week, setting the stage for more volatility in oil prices and postponing hopes for an end to the current supply glut until November.
OPEC members gather in Algiers for the International Energy Forum starting Monday and are expected to hold informal talks following the two-day event. Algeria’s oil minister Nourredine Bouterfa has warned prices could drop back into the $30 per barrel range if officials walk away empty handed, but that appears to be the most realistic scenario.
No real decisions will be made regarding an output deal but oil ministers are likely to say they are making progress, a move that effectively postpones any decision making until OPEC’s official meeting on November 30, Matt Smith, director of commodity research at Clipperdata, told CNBC’s “Squawk Box.’
Indeed, any potential deals are only likely to occur at the official policy meeting in November, echoed Mitul Kotecha, head of Asia FX and rates strategy at Barclays.
Brent crude futures were slightly higher at $46.31 a barrel during early Asia trade on Monday after losing nearly 4 percent in the previous session.
“Expectations have painted the group into a corner not to walk away empty-handed, markets have sufficient cynicism not to expect a concrete deal,” Mizuho Bank analysts said in a Monday note.
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