The highly-anticipated OPEC meeting is taking place this week, but unlike the last few meetings, the hype and excitement is much less palpable. That is largely because the end result is thought to be a foregone conclusion.
Last week, Saudi Arabia and Russia telegraphed the events of the May 25 meeting, announcing support for a nine-month extension of the existing production cuts – 1.2 million barrels per day (mb/d) from OPEC plus 558,000 barrels per day (bpd) from a group of non-OPEC countries. With the two most important oil producers in agreement, the meeting should be quick and easy.
"The decision seems to be almost a done deal," said Bjarne Schieldrop, chief commodities analyst at SEB Markets. "There seems to be a very high harmony in the group."
But if we have learned anything from the OPEC meetings over the last several years, it is that nothing should be taken for granted. Time and again the cartel seems to surprise the markets. Saudi Arabia’s energy minister hinted over the weekend that the OPEC meeting could have more drama than many analysts currently expect.
"Everybody I talked to... expressed support and enthusiasm to join in this direction, but of course it doesn’t preempt any creative suggestions that may come about," Saudi energy minister Khalid al-Falih said at a news conference in Riyadh.
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