OPEC Officials Are Meeting in Austria, Credit Suisse Expects No Action

OPEC members will meet in Austria on Thursday for their regular meeting, and talks of a production freeze will likely not even come up. According to Credit Suisse analyst Jan Stuart, OPEC will probably choose to leave well enough alone.

“We think that one of the few remaining outright bearish risks to prices at this stage is that of an intensifying market share tussle developing between key sovereign exporters, Saudi Arabia, Iran, Iraq and Russia,” Stuart explains. Credit Suisse sees this outcome as extremely unlikely.

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With oil market fundamentals on the verge of a long-awaited transition from supply surplus to supply deficit, Credit Suisse believes the best possible outcome from Thursday’s meeting is that nothing happens.

If the status quo ends up being maintained, Stuarts believes that oil investors have a solid outlook ahead. Credit Suissse believes that price risk in Q3 is skewed to the upside.

Stuart even feels that, given the current state of oil market fundamentals, Credit Suisse’s base case price forecast is likely too cautious. She points out that Saudi Arabia is the only producer not already pumping at or near capacity.

So far this year the United States Oil Fund LP (ETF) USO is up 7.6 percent.

Disclosure: the author holds no position in the stocks mentioned.