Goldman Now Expects OPEC To Reach Production Cut Deal, Raises Q1, Q2 Oil Price Forecast; Cuts Q3, Q4

Among the reasons for today’s rebound in oil prices, as noted earlier, is renewed hope that OPEC will reach a deal during the cartel’s upcoming meeting in Vienna on November 30. The catalysts include Iraq and Iran, both of whom signaled optimism surrounding the proposed OPEC supply-cut deal, while Russian President Vladimir Putin said his nation is ready to freeze crude output at current levels, and sees no obstacles to an agreement.
To emphasize this, moments ago Putin was quoted by newswires as reiterating a position he laid out over the weekend:
RUSSIAN PRESIDENT PUTIN SAYS WILL NOT BE DIFFICULT FOR RUSSIA TO FREEZE OIL OUTPUT RUSSIAN PRESIDENT PUTIN SAYS CANNOT SAY IF OIL FREEZE DEAL WOULD BE REACHED 100 PERCENT On the other hand, Iraq, OPEC’s second-biggest producer, said it would offer proposals this month to help the producer group reach an agreement on an output freeze to shore up prices. Curiously, there was no mention of Iraq actually agreeing to cut production and by how much, or just how much of the delta to 32.5 mmbpd Saudi Arabia is willing to absorb.
As Bloomberg notes, details of the Iraq proposals were not provided in an e-mailed statement from the Iraq Oil Ministry on Monday, probably for a simple reason: there were none, as OPEC’s strategy remains simple: jawbone shorts into further covering ahead of the OPEC meeting. The nation’s ‘legitimate demands’ shouldn’t be considered as obstacles to reaching an accord, Oil Minister Jabbar al-Luaibi said in the statement.
Iraq has sought an exemption from joining any production cuts, arguing that its fight against Islamic State justifies special treatment. The Organization of Petroleum Exporting Countries agreed in September in Algiers to cut their collective output to 32.5 million to 33 million barrels a day. While quotas will be decided at OPEC’s Nov. 30 meeting, Libya, Nigeria, Iran and Iraq have said they should be exempt.

This post was published at Zero Hedge on Nov 21, 2016.