Odds of an OPEC deal are greater now, RBC's Croft says

The rhetoric leading up to next week's OPEC meeting is signaling the possibility of a freeze in crude production, noted oil expert Helima Croft said Friday.

"They're putting a lot of advance work into trying to get things done in a way that they weren't before Doha," the global head of commodity strategy at RBC Capital Markets told CNBC's "Power Lunch."

"Everybody needs the money. The question is can you bridge the gap."


A worker at the Nahr Bin Umar field, Iraq.
Essam Al-Sudani | Reuters
A worker at the Nahr Bin Umar field, Iraq.

When OPEC members met in Doha, Qatar, in April, there was a different tone leading up to it, with the Saudis essentially saying they weren't going to do anything, Croft noted.

This time, economic circumstances are tougher, she said, with Saudi Arabia having already burned through $200 billion in foreign exchange reserves since the decline in oil prices.

"Nobody wants to be back in the $30s. So I think the odds are greater this time than when they were going into Doha and the last couple OPEC meetings," she said.

The 14-country producer group is holding talks next week in Algeria aimed at freezing production. On Friday, Bloomberg reported that Saudi Arabia did not expect an agreement. The news sent oil prices down about 3 percent on Friday.

According to Reuters, Saudi Arabia has offered to cut oil production if rival Iran agrees to cap its own output this year.

Croft believes if there is a freeze or even constructive framework out of the meeting, the price of oil will rise. That's because analysts expect nothing to get done.

"It's out of consensus to say you expect even a freeze at this point. So I think if we get a freeze next week or even a constructive framework — 'we're going to talk about it some more' — that will provide support to oil because right now everyone thinks that they are basically dead on arrival."

Croft said a freeze could boost oil by a couple of dollars, and a framework could add a dollar or two to the price.

— Reuters contributed to this report.