Oil futures have continued to slip this week, mostly on the lack of any solid information that the Saudis will or will not announce a major production cut at the OPEC meeting next week. In the last three days prices have slipped about $1.50 a barrel to close Wednesday at $74.58 in New York and $78.10 in London. The weekly stocks report showed an unexpected increase in US crude stocks of 2.6 million barrels putting the US inventory at the highest since last July. Stocks at Cushing, Okla. increased by 718,000 barrels to a six-month high of 23.2 million barrels.
 
Discussions of what will happen at the OPEC meeting next week continue. The general market sentiment seems to favor the idea that there will be no production cut and that prices will continue to slip. The financial press, however, keeps coming up with analysts who say that the political pressure will be too much for the Saudis and that in the end they will cut production.  Goldman Sachs weighed into the debate with the notion that a significant production cut would only lead to a large expansion of US shale oil production that in the long run would hurt OPEC.
 
The EIA reported that US crude production fell slightly last week. Cold weather in North Dakota this winter is likely to result in a drop in Bakken crude production, as we have seen in recent years, no matter where oil prices go. There is still considerable talk of US shale oil production continuing to expand simply from momentum, no matter what happens to oil prices. Some are even saying that it will take prices on the order of $40 a barrel to close down drilling operations.
 
A few analysts are tying the OPEC decision to the Nov 24th deadline for an agreement with Iran over the nuclear issue. The general idea is that an agreement would lead to some lifting of the sanctions that would lead to a major increase in Iranian crude exports. All this intrigue will make for an interesting couple of weeks.
 
The Iran nuclear talks resumed in Vienna this week. Diplomats are saying it is unlikely that a deal will be reached by next Monday’s deadline. As neither side wants the talks to fail, it is likely the deadline will be extended once again.  There are powerful forces, however, opposing any kind of compromise agreement that might be reached, both in Tehran and Washington.  This suggests there will be no meaningful agreement until there is some fundamental shift in Middle Eastern relationships and that this issue will remain a latent threat to oil exports for the foreseeable future.
 
In Iraq, government forces entered the Baiji refinery this week after ISIL forces were driven away from the siege positions around the refinery they had occupied for several months. As little crude is being produced in northern Iraq since the ISIL offensive last spring, a search has begun to find a reliable source of oil for the refinery. An ISIL car bombing took place in the Kurdish capitol of Erbil this week. As ISIL is no longer able to undertake offensive operations against Kurdish forces when they are supported by coalition air strikes, the insurgents are likely to resort to an increasing number of suicide bombings in Kurdish and Shiite-held territory.
 
US natural gas futures have climbed sharply this week as much of the country was engulfed by a cold wave.  At one point on Wednesday, natural gas futures were trading at $4.50 per million BTUs after having been as low as $3.95 last Friday. The outlook is for moderating temperatures next week.