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It’s a big day for the energy market. Over in a chilly Vienna, oil ministers from the Opec group of energy producers are gathering for a crucial meeting.
Opec must decide whether to extend their existing production cuts agreement, and for how long, in an attempt to remove excess capacity and support oil prices.
The existing deal, agreed a year ago, seems to have succeeded. Brent crude has risen from $56 per barrel to around $63 in the last 12 months.
But with competitors such as shale and renewables lurking, Opec will probably decide to extend the production curbs. But for how long? Six months? A year?
Michael Hewson of CMC Markets says the meeting could move the markets.
Today’s main event is expected to be the OPEC meeting in Vienna where it is expected that oil ministers will extend the output freeze by another 9 months, until the end of 2018. That is certainly what a ministerial committee of oil producers recommended yesterday, however that didn’t stop oil prices continuing their recent slide lower ahead of today’s announcement.
There appear to be some concerns that Russia might well throw a ratchet into the gears, particularly in the context of the length of the output extension. There has been some concern that an extended freeze could well leave the field open to US shale producers who are already pumping at record levels. Therefore the biggest question isn’t around an extension, it’s about how long the extension lasts for. We should know later today.
European stock markets are expected to be calm, as traders await developments in Vienna.
We’ll also be watching bitcoin, after it surged through $11,000 yesterday only to fall back sharply.
Plus, we get new eurozone inflation and unemployment data this morning.
Here’s the agenda:
9am GMT: Opening session at the Opec meeting in Vienna
10am GMT: Eurozone inflation data for October
10am GMT: Eurozone unemployment data for October
1.30pm GMT: US weekly jobless figures
4pm GMT (approx): Opec decision