RIYADH: Eyes are focused on the Opec ministerial next Friday. It’s been a year, since Opec — in a constantly altering market outlook — opted to fight out. Much has happened since then. Oil markets are in pain. Prices have fallen from $115 a barrel in the summer of 2014 to under $45. And if pundits are to be believed, the prospect of $30 could no longer be written off.

Global curiosity on the outcome of the upcoming Opec ministerial went up a notch, when Saudi Arabia hinted repeatedly, it would be ready to help stabilise the markets — in cooperation with the other players.

Speaking at a seminar, Saudi minister Ali Al-Naimi noted that “Perhaps it would be fitting here to mention the role of the Kingdom of Saudi Arabia in the stability of the oil market, and its continued willingness and prompt, assiduous efforts to cooperate with all oil producing and exporting countries, both from within and outside Opec, in order to maintain market and price stability.”

The minister’s comments were supported during a subsequent Saudi cabinet meeting too. “The cabinet stressed the kingdom’s role in the stability of the oil market, its constant readiness and continuing pursuit to cooperate with all oil producing and exporting countries.”

All these statements prompted widespread speculations — all around.

Phillip Futures energy analyst Daniel Ang was quoted by WSJ as asserting that despite reports that Saudi Arabia was willing to work with other producers to stabilise the market, the meeting will largely be a “non-event.”

“Unless non-Opec say they are willing to help, I think there will be no change,” an Opec delegate was quoted as saying by Reuters. “Opec will not cut alone.”

Indeed, Russia may attend informal consultations with Opec before the Vienna meeting but there is little likelihood Moscow will change its stance and work with Opec on cutting output, sources added.

“At present, I can’t see any indication that Saudi Arabia will seek to alter its market-share oriented strategy,” said David Fyfe, head of research at trading firm Gunvor.

Brian Youngberg, senior energy analyst at Edward Jones, told MarketWatch, not to expect much changes. “Saudi Arabia will say no change,” and “Iran will reiterate its plans to bring production up in 2016 regardless of what Opec says to do,” he underlined.

“Saudi Arabia remains focused on increasing market share in key markets, especially Asian markets, and more likely than not will continue to back the hands-off policies articulated at last year’s Opec meeting,” Katrina Lamb, head of investment strategy and research at MV Financial Lamb told MarketWatch.

“Opec is convinced that the strategy chosen a year ago to let supply and demand decide where the oil prices should be is the correct one,” felt Philipp Chladek, energy analyst at Bloomberg Intelligence.

News from the Opec meeting thus may include more cooperation with Russia and Indonesia’s return as an Opec member, but those don’t really have market-moving potential, Chladek added.

Even in the unlikely event that the cartel decides to make a change to its output ceiling at the meeting, the move might actually lean more toward an increase rather than a decrease.

“They’re not going to do anything,” believes Edward Morse, head of global commodities research at Citigroup. Morse expects some Opec members like Venezuela pleading output cut. Yet, he added: “It’s unlikely they’re going to get a joint decision anytime soon involving a production cut that includes Iraq, Iran and Venezuela, let alone Libya.”

Iran remains a particular challenge for Opec, since it has vowed to return to production as soon as it can, under an international agreement to end its nuclear programme. “Iranians want to raise production.” Could that wish be accommodated in the current scenario? “It’s really a nonstarter,” said Greg Priddy, director of global energy and natural resources at the Eurasia Group. “I don’t think there’s a commonality of interest,” he added. Opec members continue to have divergent views.

The bets are out: don’t expect a ‘U-turn’ — at the upcoming ministerial — as far as Opec output policy is concerned. Market woes appear set to continue — for some more time.

Published in Dawn, November 29th, 2015