Investing.com – Oil traders are betting OPEC and Russia will announce an increase in oil production this week. Analysts say it’s only a matter of how much.
Market watchers say OPEC members are fundamentally divided over what to do, and that means trying to forge some kind of compromise at the oil cartel’s meeting on Friday. Analysts say the production increase could be anywhere between 300,000 and 1.5 million barrels a day. Russia has said it wants the high end, while OPEC’s top producer Saudi Arabia is thought to be more willing to settle for a smaller increase. Analysts say the problem for Saudi Arabia is that the majority of OPEC members are opposed to an any increase at all. That group includes two key producers — Iran and Venezuela. Iran is now saying a deal at the meeting is unlikely.
At the same time, analysts say Saudi Arabia may want to make a token gesture to appease President Trump, who says oil prices are too high. Prices have soared in the past year, touching $80 a barrel.
“I think it will be a modest increase. Anyway, anything less than a million barrels per day is bullish for oil.” says Joe McMonigle, senior oil analyst at Hedgeye Risk Management.
And that could see prices quickly rebound to their recent highs.