The clock is ticking ahead of OPEC’s pivotal November 30th meeting.

Former Secretary of Energy Spencer Abraham provides a rundown of the latest discussions in the video above. This clip was taken from an in-depth institutional research call we hosted recently with Hedgeye Potomac Senior Energy Policy analyst Joe McMonigle.

Some brief notes from the video:

  • “This will be the first time in two years in which a production policy change is under truly serious consideration,” Abraham says.
  • On November 21 and 22, OPEC hosted a technical meeting with officials, in an effort to work out the actual details of the deal.
  • Last Thursday and Friday, Saudi Arabia and several other ministers met in Doha. Reuters and several other news organizations reported that an agreement was reached to offer Iran, who is pivotal to any deal coming about, a production ceiling of 3.92 million barrels per day.
  • “The preivous offer to Iran had been 3.6 or 3.7 million barrells per day so this new number is being viewed generally as increasing the potential for a deal,” Abraham says.
  • However, Iran didn’t attend the Doha meeting, Abraham points out, so OPEC’s Secretary General was in Tehran Sunday presenting the new ceiling and “to encourage Iran to participate in the OPEC oil production limit.”
  • In September, at the IEF meeting in Algiers, OPEC agreed to a deal to try to limit oil production to 32.5 or 33 million barrels per day.
  • At the Doha meeting last week, OPEC’s Secretary General indicated they are focusing on 32.5 million barrels per day, which would imply a larger cut.
  • At the Doha meeting, Iraq made the case for being exempt from the oil production freeze deal while it was fighting ISIS.

All in, the market is expecting a deal and has been bidding up oil prices.

If OPEC disappoints, and doesn’t reach a deal, prices could fall 10% or more as McMonigle points out.