Oil traders eagerly anticipating an extension of the current OPEC-led production cut could be left sorely disappointed this week, according market analysts including RBC Capital Market's Helima Croft.
OPEC oil ministers will be in Vienna Thursday and there is widespread expectation that members will decide to extend oil output cuts beyond a deadline of March 2018, a move that has helped to stabilize prices. However, there is some anxiety that the biggest non-OPEC producer that also signed up to the output cut, Russia, could pull out of an extension, sending markets sharply lower.
Croft, the global head of commodity strategy at RBC, told CNBC that Russia — or specifically Russian President Vladimir Putin — was the wildcard that could disappoint markets.
"We still think the most likely outcome is to extend through 2018 because that was a Putin plan," Croft said Tuesday. "It was Vladimir Putin who raised the issue of a full-year extension in October but since then a number of his corporates have said 'we're not so excited about that and we want to exit on schedule' so the end of (the first quarter of 2018)," Croft added.
OPEC appeared to take Putin's comments to heart with the cartel's Secretary General Mohammad Barkindo saying in October that Saudi Arabia and Russia's energy minister were taking their "cue" from Putin when discussing a possible extension to the end of 2018.