Ministers from OPEC and their non-OPEC allies are due to meet in Vienna on December 6 to determine whether and to what extent they need to curb production to balance an oversupplied market and lift oil prices.

Maintaining cohesion among the 25 states that are party to the December 2016 Vienna Declaration of Cooperation is hard enough for the expanded oil producers’ club. But U.S. President Donald J. Trump’s Twitter interventions urging OPEC to keep oil prices low will make their job that much harder. If Saudi Arabia, which has the most influential voice in OPEC, heeds the call from its U.S. ally, it is very likely that oil prices will head south in an already bearish market where all the signals point to a weaker first quarter in 2019. One OPEC insider believes that the challenge facing OPEC and the non-OPEC producers due to gather in Vienna is similar to the situation in 2014, when oil prices fell by more than $100 per barrel (/bbl) after Saudi Arabia led OPEC to maintain a high level of production in defense of market share.

The signals from Riyadh in recent days point to a shift in the Saudi position regarding a possible cut. Khalid al-Falih, the Saudi energy minister, on November 28 said that while the OPEC giant would do whatever is necessary to stabilize the oil market, it could not and would not act alone without a collective decision from all the parties to the production agreement. Falih appears to be preparing the market for the possibility of a smaller than expected output cut or none at all come December 6 if no consensus emerges. There have been some reports suggesting that the Vienna meeting may conclude without a clear declaration of intent to cut production.

Falih’s most recent remarks contrast with his more emphatic stance earlier in November when he declared, based on an analysis of the market by OPEC, that fundamentals pointed to the need for a production cut of around 1 million barrels per day (mb/d) if the current market trend persists. Other senior officials in Saudi Arabia suggested a higher number might be needed given the sharp decline in oil prices since OPEC last met in June and stubbornly high oil inventories. The price of Brent blend crude oil fell below $60/bbl on November 28, a decline of more than $25/bbl since October, when the global benchmark traded above $85/bbl. U.S. crude, meanwhile, fell below $50/bbl, its lowest in more than a year. This decline in prices alone should prove enough incentive for the OPEC-plus alliance to consider seriously curbing output to prevent a further price decline and a damaging supply surplus, but that is now no longer a foregone conclusion.

A shock to the market is what’s needed, according to one senior OPEC delegate, and would require all members to restrain production. This would include those OPEC members that were exempt from previous output curbs – Libya and Nigeria – both of which were unable to join the first round of cuts due to problems specific to each at the time. Indeed, Falih spoke in Abuja, where he is presumably trying to convince Nigeria to join in a collective production decision following the recent recovery in Nigerian output.

Trump’s Twitter stream, in turn thanking Saudi Arabia for raising its production in October and urging it to take prices even lower, has been market moving because he has leverage over Saudi Arabia’s Crown Prince Mohammed bin Salman in the wake of the murder of Saudi journalist Jamal Khashoggi. In declining to stand by CIA conclusions of the crown prince’s involvement, Trump is seen to enjoy leverage over the Saudi position at OPEC. Falih may be a seasoned veteran of the oil industry and of markets, but he ultimately reports to Mohammed bin Salman, who controls the economy and energy portfolios. Should the crown prince determine that the relationship with Trump is worth sacrificing revenue for the Saudi treasury, Falih will have a tough task in Vienna. He may have to convince fellow members of OPEC and its allies to hold off and let fundamentals drive market direction, or work with the other producers on a compromise solution.

In all likelihood, the OPEC and non-OPEC deal will be determined not in Vienna but in Buenos Aires at the G-20 summit of the leaders of the world’s wealthiest countries (Saudi Arabia is the only OPEC member of the exclusive club) beginning November 30. Trump is due to hold talks with Mohammed bin Salman who is accompanied by Falih. Russian President Vladimir Putin will be accompanied by Minister of Energy Alexander Novak.

Whether the U.S. president can convince the two principal parties to the Vienna declaration to refrain from any action to curb supplies remains to be seen. Mohammed bin Salman may feel the need to appease Trump, but Putin may not be so amenable to be seen bowing to Washington’s wishes, though he too may feel the need to give in some way due to the escalating tensions with Ukraine. But with prices tumbling below the $65-$70/bbl that Putin has declared is a comfortable level for Russia, the Russians, who are said not to be fully aligned with Saudi thinking thus far, may change course come the Vienna meeting.

While Trump may be an ominous yet absent guest at the OPEC and non-OPEC meeting in Vienna, the producers will have to consider market signals and the conclusions of the OPEC and non-OPEC Joint Ministerial Monitoring Committee, which met in Abu Dhabi on November 11. The committee issued a statement after that meeting, attended by both Falih and Novak, saying that prospects for 2019 pointed to “higher supply growth than global requirements, taking into account current uncertainties.” It also referred to the “dampening of global economic growth prospects,” which, in addition to these uncertainties, could impact global oil demand in 2019 and lead to an increasing gap between supply and demand. This could be interpreted as suggesting a need to slash production, though the language used was rather vague, leaving it up to the ministers to do the math in Vienna. According to the statement, the Joint Ministerial Monitoring Committee directed the Joint Technical Committee to continue to monitor oil market conditions ahead of the December 6 meeting and refine their analysis accordingly “with regard to options on new 2019 production adjustments, which may require new strategies to balance the market.”

Both OPEC and the International Energy Agency (IEA) in their October monthly reports revised down their demand outlooks due to a weaker economic outlook and oversupply. Lower oil prices will compensate somewhat, but this will not be enough to mop up excess supply going forward with Russia, Saudi Arabia, and the United States producing at record levels and, in the U.S. case, likely to go even higher in the months ahead. Moreover, the market is reflecting weakness by flipping into contango, when the prompt price of a commodity is lower than forward months. This encourages the building of stocks, which are at their highest since 2015 and now above the five-year average. While many market watchers are obsessed with price levels, the level of inventories is equally, if not more, important as a barometer of market fundamentals. OPEC’s strategy in first adopting its policy of production restraint in coordination with producers outside the group was to help shore up prices but also to bring down global stocks to below the five-year average to ensure that high stock levels do not act as a spoiler to their plans. According to the IEA’s latest Oil Market Report, OECD commercial stocks rose counter-seasonally by 12.1 million barrels in September to 2,875 million barrels. In the third quarter, stocks increased by 58.1 million barrels or 630,000 barrels per day, the largest gain since 2015. So, eliminating extraneous influences and based solely on the current state of the oil market, it is obvious that a production cut is needed. Uncertainty now over whether OPEC and its allies can find common ground in Vienna has clouded the picture.

Whatever the decision, what is clear is that U.S. producers are unconcerned with price or supply levels and are ramping up output despite predictions earlier in the year that infrastructure constraints such as pipeline availability as well as rising costs would force a slowdown in what has been phenomenal growth in U.S. production.

U.S. oil output in July rose above 16 mb/d, a new record. This is nearly 3 mb/d higher than a year earlier and well above earlier estimates, according to the IEA report. Overall, non-OPEC production is expected to grow by 1.9-2.4 mb/d in 2019, far higher than the IEA’s demand growth estimate of 1.4 mb/d for 2019. This in turn will lower the call on OPEC crude by some 1.7 mb/d. The numbers provide a compelling argument for a production cut as the year draws to a close, but geopolitical calculations may yet determine the outcome.