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Takeaway: Market expects Saudi/Russia to produce 9-month extension but other producers cool to full year of cuts. More likely is 3-month extension.

Hedgeye in Vienna Panel & Reception

November 29, 2017
4:00 PM Panel Discussion
5:00 to 7:00 PM Reception
Park Hyatt Hotel
Boardroom 4
Am Hof 2
Vienna, Austria

Join Hedgeye for a special panel discussion in Vienna on November 29 to discuss OPEC’s next steps, geopolitical risk and oil markets. Our event and reception will be held the day before OPEC’s ministerial meeting on November 30. Other attendees at our event will likely include: OPEC officials, member delegations, OPEC reporters and other analysts. Click here for a PDF of the event invitation and other details or contact sales@hedgeye.com.

OPEC’s upcoming November 30 Ministerial Meeting in Vienna promises to be highly consequential to oil markets. The market is expecting Saudi Arabia and Russia to produce a 9-month extension of the production cut deal through all of 2018. But a 9-month extension is far from a sure thing. Our discussions with OPEC friends have conveyed that other producers are cool to the 9-month extension option and reluctant to sign on to a full year of cuts.

Saudi Crown Prince Mohammed bin Salman added to expectations with his personal endorsement of a deal extension that only highlights its importance to the Aramco IPO.  Therefore, we believe OPEC taking no action at the November 30 meeting is highly unlikely since it would be greeted by a negative market reaction.

We see an 80 percent chance of a deal extension. The only question is how long.

We believe a likely minimum base case is a 3-month extension beyond the current deal’s expiration date of March 31, 2018. The 3-month extension would bring the deal to June 30, 2018 or just prior to OPEC’s first meeting of 2018 in late May or early June when OPEC will be in position to reassess the situation again at that time. 

EVENT: Hedgeye at OPEC – Join us for Panel & Reception in Vienna on OPEC’s Next Steps - he energy policy vienna panel NOV2017