This Thursday (November 27), while Americans will be enjoying their Turkey dinners with their loved ones, the 12-member oil-sheiks dominated oil cartel, OPEC will meet in Vienna to decide on what to do with oil production. The current OPEC quote is 30 million barrels a day. Oil investors are counting on OPEC to cut production to bring it in-line with demand, and they will be disappointed if they do not cut the quota by at least 1 million barrels. Note that OPEC does not have explicit country quota, just total production ceiling - they did away with country quota in December 2011 meeting in Oran, Algeria. Even if they decide to cut production, how credible is that going to be. All depends on what Saudi Arabia, the Central Banker of oil industry promises to do. So far they have been sending mixed messages. It will be an interesting Thanksgiving for US oil investors.
Next Thursday (December 4) the ECB will meet and decide on whether to embark on another round of QE. Investors are expecting Draghi to deliver on his promises. In the last post-ECB meeting press conference, Draghi suggested Eur1 trillion of asset purchase and he made that even more explicit at a recent speech in Frankfurt. This optimism is pushing the German 10-year to a record low (0.73%), and Spanish (1.97%) and Italian (2.16%) 10-years below the US (2.24%). But it is not a foregone conclusion that QE will happen given conflicting messages out of ECB Board members.
