The Organization of the Petroleum Exporting Countries and its allies continued to haggle over the size of potential crude-production cuts in Vienna on Wednesday.
"A massive liquidation in long positions by money managers has dampened market confidence on oil prices considerably", said Benjamin Lu of Singaporean brokerage Phillip Futures.
Novak returns to Vienna on Friday for talks between OPEC and its allies, following discussions among OPEC producers on Thursday.
"I'm cautiously optimistic that a deal gets done, but the devil will be in the detail", said Mohammad Darwazah, a director at Medley Global Advisers.
Russia's TASS news agency quoted an OPEC source as saying OPEC and its allies were discussing the idea of cutting output next year by reverting to production quotas agreed in 2016. In preparatory meetings ahead of this week's summit, delegates had said a cut of as much as 1.3 million barrels a day next year is needed as demand growth slows and USA shale production surges.
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Russian Federation has sent mixed signals into the marketplace regarding its stance on the state of the oil market and its willingness to participate in production cuts. Their summit begins Thursday. The United States is not part of any output-limiting initiative due to its anti-trust legislation and fragmented oil industry.
President Trump's Tweet could be seen as a warning to the cartel to measure any production cuts carefully, but OPEC has always been the target of Trump's tweets, even prior to his presidency, chastising the organization for restricting oil during the near-$100/barrel days.
Despite the extreme volatility experienced in the oil industry, with expectations that this trend will continue, the World Bank noted that Russia's high level of worldwide reserves ($461 billion), small global debt (29 percent of GDP), and "comfortable import cover (15.9 months) positions Russian Federation well to absorb external shocks", the report reads. Washington also gave sanctions waivers to some buyers of Iranian crude, further raising fears of an oil glut next year. Trump wrote in a tweet on Wednesday. "Being too cautious on the words, to please President Trump, runs however the risk of diluting the message", said Olivier Jakob from Petromatrix consultancy.
Possibly complicating any OPEC decision is the crisis around the killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October.
Who might agree to an OPEC crude supply deal?
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