Mark your calendar. On November 30th, OPEC will meet in Vienna to discuss whether to freeze oil production in an effort to boost oil prices. It’s a key catalyst for the direction of prices going forward and if OPEC can’t come to a deal, massive downside could be in the offing.

The latest news comes from Russian president Vladimir Putin who called a curb on oil production a “high probability” event. (Russia isn’t an OPEC member but has been suggesting if OPEC freezes, Russia will follow.)

But what if the 14 OPEC member countries can’t agree to a deal? Look out, says Hedgeye Potomac Senior Energy Policy analyst Joe McMonigle.

“They’ve so built up expectations, I think you could see, not just a 10% decline, but a 20% drop in prices,” McMonigle said on The Macro Show recently. McMonigle has long been skeptical about an agreement to freeze production, comparing a deal to “herding cats,” in which some members will participate but countries like Iran, Libya and Nigeria would be exempt.                       

To be sure, any agreement will have a lot of leaky holes.

As for Russia’s involvement, McMonigle points to a recent Bloomberg story which cited two anonymous sources “familiar with government calculations” that suggested the mere possibility of Russian cooperation with OPEC has helped to boost oil prices 63% from the January lows and added more than $6 billion to the nation’s budget. McMonigle is “surprised” there hasn’t been more verbal intervention to goose prices and help flagging oil-dependent countries in the Middle East.

These short-term moves could fade fast if a deal falls apart, he says.

Hedgeye CEO Keith McCullough interjects, in the video excerpt above, saying, “Newsflash, if you get a 10-20% move in oil prices, this is going to have massive ramifications to macro markets.” McCullough says this would “light up” the junk and high yield bond market as “all of these companies that have allegedly survived due to oil going back to $60” would become seriously distressed again. The question investors should be asking now, he says, is “Are you bearish enough?”

Stick with us. We’ll have on-the-ground OPEC intelligence from McMonigle who will be reporting from Vienna and taking the pre-meeting pulse in discussions with OPEC officials.

Stay tuned.