Prior to an expected informal meeting of OPEC ministers in Algeria on September 26-28, the oil market continues to weigh up whether any production freeze deal between OPEC and major non-OPEC producers is possible. Whether a compromise on Iran -- which is eager to ramp up output following the lifting of sanctions is achievable remains a key factor.
But even if there is a deal and oil prices rise, the production freeze architects may not be able to enjoy a higher oil price environment for long as more expensive barrels from North America could be quick to get back in the game, with a number of drilling rigs in Canada and the US already rising. As a result, the output freeze talks could be more important than their outcome, as they themselves may help to push prices up, exactly as they did in April.