Oil has risen almost 1 percent on Friday as optimism ensues as non-OPEC producers will meet in Vienna over the weekend to discuss oil and possibly agree to cut output following the OPEC’s agreement to limit production. Non-OPEC producers will meet with OPEC oil ministers to discuss whether r not to cut production.
Market analysts are skeptical on non-OPEC countries agreeing to cut output. Russia stated it would cut 300,000 barrels per day. Lukoil, Russia’s No.2 oil producer said it was ready to participate in output cuts. Kazakhstan and Azerbaijan have also noted that they were willing to cut output.
“We see event odds as skewing towards a slightly positive price impact,” analysts from Macquarie Research said in a note. “That said, we believe a status quo outcome that keeps the November deal intact is the most probable scenario and hinges on a repeated commitment from Russia (300,000 bpd). In addition to potential cuts from Oman, this scenario could also include softer commitments due to natural declines (e.g. Mexico) or other less credible cuts.”