As the price of oil languishes at a three-month low, traders are wondering whether petroleum producers will extend their six-month agreement between OPEC and non-OPEC producers to cut output when it comes up for renewal on May 25.
Following the release of data showing a faster-than-anticipated build-up in U.S. crude inventories, WTI was trading 1.08 percent lower by midday on Wednesday with Brent down by 1.12 percent.
Negative noises out of Saudi Arabia regarding an extension of the deal given its apparent disappointment over the compliance demonstrated by other partners in the deal has caused tremors through the market.
Yet the agreement will most likely be extended, according to analysts at RBC Capital Markets, in a note published on Tuesday.
"In the past week, both the oil ministry and the oil minister have doubled down on Saudi's determination to do whatever it takes to ensure its success," claimed the research note.
"Elevated inventories likely will be the official reason for the roll over – certainly taking center stage among the technocrats in the oil ministries – we contend that domestic economic considerations will also be decisive factors at play for the leaders of these petro-states," the analysts added.
Looking to the key players involved, RBC advises keeping a close eye on both Saudi Arabia's Deputy Crown Prince, Mohammed bin Salman, and the oil minister, Khalid al-Falih, who is also chairman of Aramco, the country's national oil and gas company.