Excitement builds for Algiers meeting

Encouraging comments by Iraq’s OPEC governor on Thursday and an alleged meeting between rivals Saudi Arabia and Iran in Vienna have led some to speculate that next week’s OPEC gathering in Algeria might produce results.

In a note published on Thursday, RBC Capital Market’s Helima Croft and fellow strategists wrote, “Heading into the special OPEC meeting in Algiers…In our view, the odds are in favour of the cartel opting for pragmatism and announcing a moderately constructive framework.”

Also on Thursday, the director general of Iraq’s Oil Marketing Company and the country’s OPEC governor, Falah Alamri, said that the market conditions were more favourable for a deal on measures aimed at stabilising global oil markets. “This time I think a little bit different [than in Doha] because circumstances are little bit better, helping [producers] to reach a deal,” Alamri was quoted as saying.

A meeting today between Saudi and Iranian officials at the OPEC headquarters in Vienna further added to the buzz. Accompanied by officials from Qatar, the rivalling producers reportedly discussed preparations for the Algeria talks, sources familiar with the ongoing meeting told Bloomberg, which quoted Michael Lynch, president of Strategic Energy & Economic Research, as saying that “a positive result to the talks in Algiers” was becoming a more likely scenario.

However, a Bloomberg survey among 23 oil and gas analysts conducted on Thursday paints a different picture, as only two of those surveyed said an agreement would be reached next week. Citigroup pointed to OPEC’s distrust in Russia’s commitment freezing output as one of the obstacles to an agreement