Market watchers are keeping a keen eye on Vienna this week as the Organization of the Petroleum Exporting Countries (OPEC) meet to discuss how to boost prices and stabilize the market by extending a current agreement to cut supply.
Michele Della Vigna, commodity equity business unit leader in EMEA for Goldman Sachs, told CNBC's Squawk Box Wednesday that "We think that the base case is just an extension" of the existing agreement to curb supply. But, OPEC "could surprise with deeper cuts," he added.
When questioned on the existence of OPEC as a means of controlling the market, Della Vigna said that the cartel "matters for the inventory path in the next six months." But, he added that the organization's "medium term pricing power (is) zero," attributing this to U.S. shale upping its supply to the market in correspondence with OPEC cuts. Della Vigna referenced the discount between spot and forward oil prices as now being zero, in comparison to 10 percent in November.