OPEC skepticism:

  • Lot of skepticism surrounding OPEC’s ability to finalize a preliminary production cut deal it reached in late September at tomorrow’s meeting. No meaningful progress made at a 10-hour meeting on Monday. Iran and Iraq still said to be the stumbling blocks facing a deal. In terms of the former, Bloomberg reported that it proposed a deal in which it would freeze production at 3.975M bpd, ~200K above its current output. However, the Saudis countered with a proposal for Iran to cap output around its current level of just over 3.7M bd. The report added that while Algeria proposed compromise of 3.795M bpd, it is unclear if that scenario will gain any traction on Wednesday. In addition, the Saudis have reportedly continued to insist on an output cut from Iraq, which has maintained its position that it should be exempt given its ongoing war with Islamic militants. The Saudis have also said there will not be a deal without cuts from Russia, though the latter has repeatedly said it will only freeze production.