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The OPEC-Russia production cut isn't a done deal

Saudi and Russian energy ministers
Saudi Energy Minister Khaled al-Faleh (L) and Russian Energy Minister Alexander Novak (R). Photo: Amer Hilabi/AFP via Getty Images

"Russia’s energy minister insisted the country and its allies in OPEC need to watch the oil market in the coming weeks before making any decisions to cut output," Bloomberg reports.

Why it matters: The Russian wavering is a sign of tricky negotiations looming in Vienna next month with OPEC and allied producers will discuss dialing back production to prop up prices, which have tumbled by roughly $20 per barrel since early October.

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The intrigue: The Bloomberg piece lays out why Russian and Saudi interests are only aligned up to a point.

  • It notes that the Saudis need prices around $73 per barrel to balance their budget (Brent is trading at almost $67 this morning).
  • The other side: "In Russia, the state budget is much less dependent on oil prices than it was when the country agreed to join OPEC-led efforts to rebalance the market back in 2016."

But, but, but: "Market expectations continue to grow that OPEC+ will agree to cut production at their meeting in early December by anywhere between 1-1.4MMbbls/d," ING analysts said in a note Monday.

Oil production