SAN ANTONIO—The Nov. 30 meeting of OPEC could have a dramatic impact on already volatile crude oil prices. How things play out for crude in 2018 remain to be seen.

Jeff Quigley, director of energy markets for Stratas Advisors, will attend that meeting in Vienna and outlined key drivers that must be considered as the cartel’s members mull its efforts to rein in supply in a Nov. 16 presentation at Hart Energy’s DUG Eagle Ford conference. (Editor's note: check back on this website on Nov. 30 for updates from Jeff Quigley from Vienna.)

“The market shifts have been incredible,” Quigley noted, and that could make the meeting contentious. “Markets now have a very bullish mindset, OPEC could not have written the script any better. But mindsets turn on a dime” while the actual market can’t move that quickly.

Quigley described the surprising turnabout in oil markets that occurred in just in the first 11 months of 2017. In January, he said, crude markets were weak, led by U.S. gasoline supply data. But by November, oil prices showed surprising strength, supported by strong Asian price spreads.

Likewise, in January OPEC’s production cuts indicated a tightening market. In November, the OPEC cuts were working, creating backwardation by traders and the U.S. shale plays were hurting.

“We have gone back to a world where geopolitics have to be watched again,” Quigley said. “The key is going to be what happens in Saudi Arabia and Iraq.” Venezuela’s spiral into near anarchy and civil unrest in Nigeria and Libya also bear watching.

Iraq has had lingering political instability but disagreements with its Kurdish region have troubled its oil business even more. Meanwhile next door, recent anticorruption moves by Saudi Arabia’s Crown Prince Mohammad bin Salman have shaken one of the most staid and conservative nations in the world. “It’s unclear which way it will go and how the Saudi Aramco IPO will move forward,” Quigley said.

“Now that prices have rebounded, how does OPEC sustain prices without losing to shale?” he added. “Keeping uncertainty in the market is the only way to win, to keep volatility high.”