This week’s OPEC meeting in Vienna is likely to pass without any major surprises. Policymakers should be a little happier heading into the meeting than they were at the previous one in December – after all, oil prices broke through US$50pb last week for the first time this year, up more than 70% from their lows in January. However, we doubt that the meeting will conclude with any meaningful agreement. Recent comments from Saudi Arabia’s new Oil Minister Khalid al-Falih suggest that there is a strong possibility that the Kingdom will increase production in the coming months in order to meet domestic demand over the summer. This, coming alongside rising production from Saudi Arabia’s long-term foe, Iran, means that any attempt to resurrect a deal to freeze oil output is unlikely to get off the ground.
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