Certainly, the deeds of OPEC and Russia have not matched their words. Surveys of October's production by OPEC saw an overall output level of around 34 million barrels per day, up 170,000 barrels per day from September, and a long way from the agreed to target of 32.5 million barrels per day.
Iran, Iraq, Libya, and Nigeria have all requested that they be exempted from any production limitations, and they collectively added 450,000 barrels per day of output in October. They all cite different rationales of equity for their requests, ranging from years of depravation due to sanctions on Iran to needing cash to fund the fight against ISIS by Iraq.
Russia has probably been the most two-faced in this entire exercise, with various officials giving conflicting statements of support for limiting output, while, at the same time, engineering a significant increase in the country's oil production in recent weeks to over 11 million barrels per day, with more to come.
The Russian energy minister, in a moment of candor, even remarked that any accord that resulted in higher prices would only revive the U.S. shale oil industry.
He should know that U.S. shale is already reviving, as demonstrated by the rising rig count and nascent rebound in U.S. lower 48 states production.
Given the reality of higher, not lower, production from seemingly every corner of the producing universe, the market is removing the Algiers deal premium from prices, and it will continue to do so.
In fact, the selling is likely to intensify further into the November 30th meeting of OPEC ministers, where they would have you believe a definitive production will be struck. The market is finally calling OPEC's bluff, and will push the group to the precipice, as the pressure on them will become intense.
Still, no deal will be struck. While the Saudis appear willing to carry a good portion of the load, they will not carry a 1.5-to-2.0 million barrel per day load, while the rest of the special cases do nothing.
They will try to keep the deal hopes alive, however, by likely saying that strong demand from the northern hemisphere winter alleviates the need for a cutback, for now. An agreement to study the situation further and meet again in the spring is the likely outcome.
The global physical market is getting sloppy or oversupplied again, as evidenced by the discount of near-term futures contract prices to longer-dated contracts. Already, deals involving the storage of oil on tankers are picking up, which only exacerbated the oversupply condition.
Because of all this, WTI oil prices are set to trade back down to the mid-$30, at least, putting the February low of $26.05 back in-play, into year-end.
2017 is looking like another challenging year for the energy industry.