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Will OPEC deliver oil deal in Doha?

When OPEC and non-OPEC oil producers meet this weekend, it will be one of the most closely watched oil summits in years, but few experts believe the get-together will result in a output freeze that would help lift global prices.

Around 15 major oil producers from both the OPEC cartel and non-OPEC countries are expected to attend the meeting in the Qatari capital Doha on Sunday but analysts said that hopes of any "fireworks" would likely result in disappointment.

Since news emerged earlier this year of the meeting, oil markets have stabilized from the historic lows seen at the start of the year, rising from a low of below $27 a barrel to currently trade around $40 a barrel.

On Monday, however, oil prices dipped on concerns that the meeting would not improve the current imbalance between the supply of, and demand for, oil with Brent crude currently trading down 20 cents at $41.75 a barrel while U.S. WTI crude is 21 cents down from the previous session lower at $$39.52.

Analysts at Goldman Sachs warned in a note Monday that the meeting was unlikely to deliver a "bullish surprise" for oil markets and they maintained their price forecast of $35 per barrel in the second quarter.

The note, entitled "Doha is no panacea," also said that there was also a "multitude of potential production growth sources" to keep OPEC crude production growing. The analysts, Damien Courvalin, Jeffrey Currie, Abhisek Banerjee and Raquel Ohana, noted too that even if an agreement to freeze production is reached in Doha "it would not accelerate the rebalancing of the oil market as OPEC (ex. Iran) and Russia production levels have this year remained close to our 2016 average annual forecast of 40.5 million barrels a day."

The balance of supply and demand in the global oil markets has been out of kilter since OPEC refused to cut production in November 2014, choosing instead to defend its market share in the face of non-OPEC rivals such as shale oil producers in the U.S. In the meantime, a global slowdown and jitters over China's outlook saw demand failing to keep up with the record output from the 13-member producer group.

Muslims leave after they perform Eid el-Fitr prayer at Imam Muhammad ibn Abd al-Wahhab Mosque in Doha, Qatar, on July 17, 2015.
Enes Kanli/Anadolu Agency/Getty Images
Muslims leave after they perform Eid el-Fitr prayer at Imam Muhammad ibn Abd al-Wahhab Mosque in Doha, Qatar, on July 17, 2015.

Making matters worse for countries that rely on oil export revenues for their wealth, Iran's return to the market as a major oil producer following the lifting of international sanctions does not bode well for a cut in output and boost for prices.

Goldman Sachs noted that Iran's crude production had already "surpassed expectations" and said that oil output from Saudi Arabia (the de facto leader of OPEC and yet political rival of fellow OPEC member Iran) was "expected to increase in coming months," further adding to expectations that "the balancing of the oil market "is still far from secured."

Rebalancing 'far from secured'

In a sign of tensions between the two major producers, last week, Saudi Deputy Crown Prince Mohammed bin Salman said his country would only limit output if Iran did the same. Iran, a country keen to restore its economic strength after years of sanctions, has said it may attend the Doha talks but will not talk output cuts, according to sources quoted by Reuters. Goldman also noted on Monday that "the biggest hurdle to reaching any meaningful agreement will be the conflicting Saudi and Iranian stances."

Read MoreChance of workable OPEC freeze at Doha is 'minimal': CIO

Meanwhile, analysts Bruce Kasman, David Hensley and Joseph Lupton from JPMorgan said in a note this weekend that no one should expect "fireworks" from the meeting.

"Reaching an agreement likely will be meaningless for most, with production levels already near historic highs, while the countries with the potential to add the most crude supply to the market—Iran and Libya—are fiercely opposed to any freeze."

Calm Vs Price war?

JPMorgan's analysts noted that officials from Latin America were expected to meet this past weekend to decide how to position for the meeting.

Goldman and JPMorgan weren't alone in its pessimistic tone with other analysts joining the chorus forecasting a gloomy outcome from the summit but one noted that countries attending the meeting could choose stability over a price war.

"Oil prices have pulled back ahead of that meeting and I would be surprised to see a statement that aggressively curbs production," Credit Suisse's chief Investment Officer Michael Sullivan said in a note on Sunday. "Still, it now seems that among the oil producing countries, a sense of calm and price visibility is preferable to the chaotic downward spiral of a price war."