Silly side talks, oil price hawks, dressed in mighty high style, in the air, there’s a feeling of OPEC.  

Members clashing, oil slashing, meeting time after time, and on every press conference you’ll hear.

Oil wells. Iran rebels, soon it will be OPEC day.

Well OPEC day is here, and the eagerly awaited announcement about their intention on production going forward will be the driving force of the day. Signals are coming from Vienna and the market appears to believe that Saudi Arabia can convince OPEC and Russia to agree to a larger production cut. That may be because the Saudis might have made a threat to the freeloaders in the cartel to comply with cuts or else Saudi Arabia might stop carrying the load. The Wall Street Journal had reported that” Saudi Arabia is threatening to boost oil production unilaterally if some OPEC nations continue to defy the group’s output curbs, cartel officials said. The ultimatum comes ahead of a gathering between the Organization of the Petroleum Exporting Countries and oil-producing allies, including Russia, on Thursday and Friday in Vienna. Saudi Arabia, OPEC’s de facto leader, is contending with weak oil prices and members of the cartel who aren’t complying with the collective output cut they agreed to last summer.”

Of course, that story, in part, inspired the black and blue Friday sell-off in oil. Yet it appears that the members got the message. In fact, according to the latest S&P Platts data, OPEC cheaters are getting in line. OPEC pumped 29.65 mil b/d of crude oil in November. They said that 11 members with quotas under OPEC+ deal achieved 145% compliance – 370,000 b/d under their quotas. They said Iraq and Nigeria still producing above their cap but getting closer to being back to the quota.

Reuters reported that “OPEC’s second-largest oil producer Iraq said on Tuesday Saudi Arabia was supporting deeper cuts for OPEC+ to 1.6 million barrels per day, or 1.6% of global demand, from the current level of 1.2 million bpd.“My understanding is that they (Saudis) do (prefer it),” Iraqi Oil Minister Thamer Ghadhban said on Tuesday. On Wednesday, Ghadhban said he would support at least extending existing cuts to end-2020 from March: “We have to give a positive signal to the market and me at least we should roll-over present agreement.”Oman’s oil minister Mohammed al-Rumi said on Wednesday his delegation would recommend extending cuts until the end of 2020. Saudi Energy Minister Prince Abdulaziz bin Salman declined to comment on policy matters upon arrival in Vienna. Bloomberg wrote that Saudi Arabia is offering fellow OPEC+ members a quid pro quo: If you stop cheating, we’ll curb production.

That leaves Russia. Will they play along? Reuters reports that, “non-OPEC Russia has yet to agree to extend or deepen cuts from its current pledge of 228,000 bpd as its companies are arguing they are finding it tough to reduce output during winter months due to very low temperatures. Russian Energy Minister Alexander Novak said on Tuesday that Moscow had yet to finalize its position: “Let’s wait ...But I think the meeting, as usual, will be constructive.” A source familiar with the Russian thinking told Reuters that Moscow would likely reach a consensus with OPEC this week and just needed to iron out a few outstanding issues.

Those issues might be condensate. As I wrote for Fox Business Network.com, “The big issue is Russian condensate. Condensate is very light almost gaseous oil. Russia says because they do not export it, it should not be counted as production. Yet other OPEC members have to count it, mainly because they export it. Shale oil is condensate in many cases. This is a sticking point but should not be a deal-breaker for an extension of cuts but it could be the reason we don’t get a bigger cut.

Natural gas is as crazy as the weather. Bret Walts at Bamwx says that, "Good morning! We’ve moved past our low point in week 1 HDDs and are rising with a big arctic blast of cold air beginning at the end of week 1 and into week 2. This blast will soar GWHDDs into the mid-30s for a few days next week behind the storm. We don’t necessarily favor one model solution or the other for week 2, especially given a continued near 40 point difference. Our general takeaway remains the same: we will continue to see up/downs in heating demand with an overall cooler pattern in the Central/East into ~Dec. 20th. Beyond that, more durable cold remains possible.”