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No OPEC deal expected, though it would have had impact: CNBC Oil Survey

Offshore oil rig
Alison M. Jones | Getty Images

OPEC producers could have a significant impact on oil prices if they agree to a production freeze, but it's unlikely they'll get it done at this week's meeting in Algiers, according to a new CNBC Oil Survey.

Sixty-five percent of the survey respondents said no agreement is likely, while 52 percent said if producers could strike a deal, there would be a meaningful effect on crude prices. That may be because little more than half of the participants also said they believe the rebalancing of oil supply and demand is occurring more slowly than they had expected.

About 90 percent of the survey respondents believe West Texas Intermediate oil prices will be above $40 per barrel at the end of the year, with nearly 40 percent expecting them between $50 and $59 per barrel. Fifty-seven percent expect oil prices to remain stable, with just 13 percent seeing another drastic drop. Thirty percent see prices moving higher.


"Crude oil is comfortable between $40 and $52 per barrel, but that range would be extraordinarily uncomfortable should there be any hint of U.S. recession," said Tom Kloza, head of global energy research at the Oil Price Information Service. "The lows are likely in October, when global refinery maintenance peaks. The highs may occur at year's end, but only if we have some early winter in the northern hemisphere."

There was a real split on the question of market rebalancing, with the 52 percent who see a slower-than-expected rebalancing of supply and demand. But another 22 percent the rebalancing is proceeding as expected, while 26 percent said supply continues to be greater than demand.

"Inventory is the key variable to watch in terms of the actual supply/demand balance. U.S. inventory is the most accurate and most available and will continue to be a significant influencer of prices in the absence of OPEC noise/action. Inventories are tightening," according to Dan Pickering, co-president of Tudor Pickering.

There has been market talk that OPEC could come up with a rough accord in Algeria this week and then hold an emergency meeting to cement a deal. But 61 percent said they do not expect to see an emergency meeting from the cartel this fall, while 26 percent said they did. Another 13 percent said they were uncertain.

There were 23 oil analysts, traders and experts who took the survey last week.

Slightly more than half — 52 percent — expect U.S. oil production to remain flat in the next six months, while 22 percent said it could rise significantly and another 22 percent see it increasing slowly.

Crude prices are expected to be influenced mostly by demand trends (39 percent), then global overproduction (22 percent). Just 13 percent said OPEC would be the most important factor influencing crude. Another 9 percent pointed to dollar fluctuations, and 9 percent cited geopolitical events. Eight percent specifically pointed to U.S. production.

Three quarters of the participants said the U.S. election is not likely to influence the price of oil. But when specifically asked about each candidate, 74 percent said Democrat Hillary Clinton would not impact prices, while 48 percent said Donald Trump would have no effect. However, 35 percent said prices would move higher with a Trump presidency and 17 percent said they would move lower.