Oil futures extended declines on Tuesday (29 November) as the market continued to cast doubt on Opec's ability to deliver its first headline production cut in eight years, while non-Opec Russia said it would not be participating in the talks.
At 2.51pm GMT, the West Texas Intermediate (WTI) front month futures contract was down 4.07% or $1.77 to $45.29 ($56.70, €53.30) per barrel, while Brent was 4.04% or $1.79 lower at $46.44 per barrel, as preliminary talks between Opec experts at the cartel's secretariat in Vienna yielded little of significance, ahead of the arrival of Saudi oil minister Khalid Al-Falih.
Saudi officials have remained tight-lipped but sources told IBTimes UK that the kingdom might be willing to accommodate some Iranian demands aimed at the Islamic republic capping its production around the 3.8 million barrel per day (bpd) target instead of a real-terms cut.
Iran, Iraq, Nigeria and Libya are not expected to partake in the Opec cut, something which major Middle Eastern exporters are finding difficult to accept. Speaking to reporters upon his arrival, Iraqi oil minister Jabbar Al-Luaibi said he was optimistic Opec can reach an agreement "acceptable to all members", but declined to comment when asked by IBTimes UK if he would be willing to make a concession.
Earlier in the session, Russia said it would not be attending talks between Opec and non-Opec producers. However, the Kremlin did not rule out a meeting at an unspecified later date, as Opec continues to grapple with internal disagreements over it proposed cut of 1.1 million bpd.
Speaking to reporters upon his arrival, Iraqi oil minister Jabbar Al-Luaibi said he was optimistic Opec can reach an agreement "acceptable to all members", but declined comment when asked if he would be willing to make a concession.
A poll of 12 City analysts by IBTimes UK suggests only a 50% chance of a deal being reached in Vienna, while investment bank Goldman Sachs rates the chance of a deal being reached several notches lower at 30%.
Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB, also sees very low chance for an Opec cut.
"Kicking the can to the next Opec meeting in half a year's time could well be the call of the day. Fact is that half a year has passed since the last Opec meeting and Iran is still not offering any more than a 'no cut from Iran'. We now find it hard to believe that this is going to be solved today or tomorrow.
"We think that the oil price is likely to trade to the downside of $45 per barrel as a no-cut is actually communicated. However, we do not think that it will stay there all that long and that it will revert back towards the $48 per barrel level where it has traded since the start of June."
The International Energy Agency has said that in the absence of a production cut by Opec, the oil market will take longer to rebalance in 2017, extending market surplus into a fourth successive year.