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.