OPEC Deal Uncertain As Ministers Meet In Vienna

| About: The United (USO)

European equity markets are expected to open a little mixed, while oil is seeing some profit taking following yesterday's sharp losses as OPEC ministers prepare to meet in Vienna.

Moves in oil have been a little wild again recently, with the build up to the OPEC meeting offering the usual mix of rhetoric that leaves traders none-the-wiser about whether a deal is likely to be struck. As always, there appears to be an agreement that a production cut is necessary but unfortunately, the implementations of such a cut is far more difficult to negotiate, hence the skepticism that followed the "deal" in Algiers.

Still, despite the apparently unsuccessful meetings that have already taken place this week, traders have not given up hope of a deal happening today just yet. Brent and WTI both continue to trade just above $45 a barrel, roughly in the middle of where we could see them trading if a deal is either agreed or scrapped. I think the most likely outcome may be a deal that comes with so much conditionality that markets lose faith in it being fully implemented before too long. This may though be enough to see oil trading back above $50 though in the short to medium term.

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Away from Vienna, there are a number of other economic events today that will be of interest. The flash reading of eurozone inflation for November is expected to edge slightly higher this morning, although not likely enough to impact the outcome of the December ECB meeting at which we're expected an extension of the QE program to be agreed.

This will be followed later by the US ADP release, as well as personal income and spending figures and core PCE price index, the Fed's preferred inflation measure. With a December hike now almost entirely priced in, the data is unlikely to offer much more upside but it will be interesting to see if traders will be spooked by some weaker reports ahead of the meeting. We'll also hear from three Fed officials today - Robert Kaplan, Jerome Powell and Loretta Mester - and get the latest oil inventory data from EIA.

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For a look at all of today's economic events, check out our economic calendar.