Saudi Minister of Oil, Khalid al-Falih, recently said the declining oil cycle has ended. He sees improving fundamentals and a more balanced oil market. But November could be crucial to the ending of this cycle. November is very important to the future oil price movements.

Khalid al-Falih is convinced the price of oil will rise again. There is a more balanced oil market and the Gulf States are putting in more effort to stabilize production. But that could receive a blow at the end of November. OPEC’s meeting on November 30 will reflect the true commitment from the OPEC members.

So OPEC didn’t only invite its members, it also invited Russia and other important non-OPEC countries. On September 28, OPEC members agreed to cut production to 32.5 – 33 million barrels a day. This was the first production cap since December 2014 when OPEC decided to pump as much oil as they could to kill shale oil in the United States. That hadn’t happened since 1982.

But not all OPEC members want to cut production

Currently OPEC produces 33.75 million barrels of oil per day. Iraq produces 4.8 million barrels per day and said it didn’t want to cut production. Libya and Nigeria want to raise production after those countries were hit by terror and sabotage. And Iran isn’t backing off either.

The November 30 meeting must put all noses in the same direction, otherwise it’s an agreement without any meaning that could have a big influence on the price of oil. It could rock the market again like it did two years ago.

OPEC has done everything it could to put the shale revolution on a break. While the oil production in the United States didn’t break, OPEC did gain the market share. As you can see, OPEC oil production increased while non-OPEC oil production decreased.

But what’s left from the shale oil companies is mean and lean. It can hold on to lower oil prices much longer as anticipated. And it’s very flexible to changes of the oil price so it can’t be killed anymore. OPEC needs to think about its budget again. Many countries lost a big chunk of resources.

Jim Rogers thinks oil prices will rise again

But this can change again. When OPEC agrees to cap production as agreed in Algiers, the price of oil will rise again and the Middle East will see more oil dollars coming in.

In the long term, this is also the view of Jim Rogers who thinks oil prices will start to rise again, much higher than anyone can imagine. While Rogers isn’t right on many things in the short run, his view on markets in the long run is remarkable.

So November 30 can be the start of a new oil super-cycle. Assuming tight oil peaks out before demand does, it could result in another period of supply tightness as OPEC becomes a dominant force in supply, just as it did in the 1970s.