Opec dithering on output cuts could kill oil's rally

London

BRENT crude's brief flirtation with a US$60 price level already seems to be fading. Opec and its friends are facing their last chance to swing sentiment in the oil market this year. They shouldn't get too precious about it. What ministers say at their Nov 30 meeting may have little bearing on what they actually do, but it could have a big impact on prices.

Compliance with the output cuts they agreed late last year has been better for longer than for any other deal in the group's history. But now they must decide whether or not to extend their agreement after it expires at the end of March. That may seem like a long way away, and it is. A lot can change in the oil market in four months - just look at how inventories in key OECD countries have come down since the start of July.