The chart above aptly displays investors' views on the potential outcome of the impending meeting of OPEC producers and their allies, which will be held on December 1. It is based on a tool developed by CME Group, which screens the sentiment of oil traders using the combination of the front-month WTI options contract at the time of the meeting (in this case the January 2025 contract) and the nearest active Crude Oil Weekly option prices. As these variables change, so does the implied probability of various scenarios.

It is conspicuous that the market does not anticipate the producer group to raise the collective output level at the beginning of December. At the time of writing, the most likely possibility was to stick with the latest decision and gradually scale back on voluntary output constraints of 2.2 mbpd by adding 180,000 bpd of oil back to the market over the course of 12 months starting in January. (This move has already been delayed on two occasions.) It is also noticeable that the probability of OPEC further delaying the above-mentioned increase gained popularity between November 11 and November 20.

Herein lies the dilemma OPEC, in general, and its kingpin Saudi Arabia, in particular, face. In their effort to support the market and create a tighter oil balance, the group, and within that, individual producers, voluntarily sacrificed market share. The price action of the last year or so has not justified this strategy. Front-month WTI, for example, has lost more than 25% of its value as producers outside OPEC+ happily filled the void left in the supply market by the group. It is increasingly possible that OPEC+ will decide to gradually reclaim its market share in the not-so-distant future and take the view that to run a price campaign against its competitors is more beneficial for them in the medium-term than leaving oil in the ground. A recent survey amongst analysts found that the voluntary cuts might be extended beyond January because of weak demand. If it proves to be the case all it will do is to delay the inevitable. Rather sooner than later market reality will force the alliance to unwind cuts and OPEC Watch will provide a helping hand in determining when that outcome becomes reality.