Oil prices will be ‘sloppy’ even if OPEC curbs production, analyst says

Officials from oil producing nations were once again talking up a deal to curb output on Friday, but even if they reach an agreement this month, crude prices will remain choppy this year, according to RBC Capital Markets' Helima Croft.

The market experienced a "tale of two Augusts," RBC's head of commodity strategy told CNBC's "Worldwide Exchange" on Friday. Oil prices were initially bolstered by renewed hopes for an output freeze when OPEC members and Russia meet on the sidelines of the International Energy Forum in Algeria from Sept. 26 to 28.

Russian President Vladimir Putin expressed support for a production freeze in an interview with Bloomberg published Friday, the same day his energy minister, Alexander Novak, played down the prospects of capping output. Also on Friday the foreign minister of top oil exporter Saudi Arabia said the kingdom is optimistic producers will reach a common position.

But the OPEC rally has been tempered by concern about oversupply as crude and fuel stockpiles remained stubbornly high throughout August, and the United States logged two straight weeks of record crude imports, Croft said. With storage so high and many OPEC members pumping at record levels, a deal in Algeria would do little to affect global oil supply, she said.

"This is all a sentiment game at this point. I think sentiment has been driving the market, and so I think if you have the sense that OPEC could do something, it does firm a floor and potentially moves us four or five bucks higher on the day," she said.

Still, RBC Capital Markets sees oil prices grinding higher into the $50 range by year-end in the face of macroeconomic headwinds. Those include a strong U.S. currency, which makes dollar-denominated oil more expensive to holders of other currencies.

Oil prices have been stuck in a range between about $40 a barrel and the low $50s.

"It's going to be sloppy until year-end. We look to next year and say we can clean out this overhang and the inventories. That's when you move into the $60s," she said.