OPEC oil ministers continue to send mixed signals as to whether there will be a production cut at the Cairo meeting on November 29th, at the Oran meeting on December 17th , or both. The “price hawks” – Iran, Venezuela, and Libya – are calling for an immediate cut while the Gulf Arab states have little to say as usual.

The size of a cut most frequently mentioned is 1 million b/d or more. If a cut of this size is decided upon and actually made effective, the total of the three OPEC cuts this fall would come to 3 million b/d. This could be overkill and would likely lead to much higher prices and even shortages unless the world economy contracts even faster.

The likelihood of Russia coordinating a production cut with OPEC seems to be increasing. Russia’s Energy Minister said at a conference this week that “Russia will coordinate with OPEC to defend its interests” and “we cannot rule out cutting production.” Some observers are skeptical that Moscow would break long term contracts.