What the big names on Wall Street expect from the OPEC meeting this weekend

As oil is traded close to a three-year high while global stocks are declining, many traders and investors are wondering if OPEC will take a step towards ending the abstraction program. Given that OPEC and Russia are heading for a summit this weekend in Oman, part of the Wall Street major shared their views on the outcome of the meeting.

"The likelihood of the agreement being terminated by the end of the year has grown significantly," said Harry Tchilinguirian, Head of Commodity Trading at BNP Paribas SA. "If Brent continues to trade close to $60 a barrel and stocks are kept at current levels, a large number of parties to the deal will withdraw because their cuts do not cover budget deficits," Tchilinguirian added.

"I do not think the deal itself will end, much less, just after an OPEC meeting, but we will rather see a gradual cessation, similar to the abbreviation of QE programs by central banks," said Bjarne Schieldrop, commodity analyzer at SEB AB.

Giovanni Staunovo, a commodity analyst at UBS Group AG, expects such a close of events.

Citigroup is the boldest in expectation, believing that OPEC and Russia will initially end the program, and then increase production.

Russian Energy Minister Alexander Novak said the summit in Oman would most likely end with a decision to phase out the cut-off program.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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