The market doesn’t seem to know what to expect ahead of this week’s OPEC meeting in Vienna.
OPEC leaders were expected to meet on Wednesday to finalize a deal to dial back production while the global oil market rebalanced from a prolonged supply glut. However, developments leading up to the deal have left its fate hanging in the balance.
Back in September, OPEC agreed to cap production at 32.5-33.0 million barrels. The deal was expected to be finalized this week and include participation by non-OPEC producers such as Russia, Azerbaijan and Kazakhstan.
Unfortunately, recent commentary surrounding the deal has taken a more uncertain tone. On Friday, OPEC canceled a meeting with non-OPEC producers.
Saudi energy minister Khalid al-Falih had previously indicated that the kingdom was motivated to finalize a deal. Over the weekend, al-Falid said the global oil market
On Tuesday morning, there were reports that Iran won't cut oil production. Meanwhile, Algeria's Energy Minister reportedly said OPEC discussions are "progressing in the right way."
At this point, it’s hard to say whether or now a meaningful deal will take place. Traders should be mindful of the impact that the meeting's outcome could have on oil prices and oil stocks.
The most direct play on oil prices is the United States Oil Fund LP (ETF)
Among oil stocks, crude prices are most critical for distressed oil E&P stocks and offshore oil services companies. A rally or sell-off in WTI crude oil prices could have a major impact on offshore drillers such as Franks International NV
Traders looking for a more conservative stock play on the OPEC meeting should consider the more diversified VanEck Vectors Oil Services ETF
All of these stocks and ETFs will likely be
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