What to watch out for in OPEC meeting tomorrow

Tomorrow members of Organization of Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna to discuss over the oil market and their future strategy as a group. In the past, OPEC has been very instrumental in determining both oil price and supply in the market but recent days, bitter relations among its members, namely Saudi Arabia and Iran, left it largely irrelevant as they failed over and over again to make a joint response to oil price decline since 2014.

So, market expectations of joint response from the meeting is low. Nevertheless, any unexpected event can cause enough volatility in the oil market, as they represent more than a third of global oil production.

So what to watch out for –

• Joint response if any from the group over OPEC’s future strategy.
• Unlikely but if the group could agree to a ceiling, formal or de-facto.

Two members will gain most of the attention –

• Saudi Arabia’s new oil minister Khalid al-Falih, who replaced 80 year old oil veteran Ali al-Naimi and is much closer aide to Saudi strongman Mohammad bin-Salman. Focus will be on his every word to grasp the strategies of Saudi Arabia under the new regime. Focus will be on recent comments and rumors that Saudi Arabia plans to boost output to 11 million barrels/day.

• Next most attraction will be on, Bijan Namdar Zangeneh, Iranian oil mister, who could lay out his country’s strategies in response to higher output from Saudi Arabia.

Oil is in little back foot ahead of the meeting. Brent is currently trading at $48.9 per barrel.