Market uncertain as Opec and its allies meet in Vienna!

• Saudi Arabia and Russia were meeting for make-or-break preparatory talks.

As ministers from Opec and its allies meet in Vienna today for crucial talks markets remain uncertain over the outcome, but the most likely baseline scenario expected to emerge is that the group would agree to cut output by 1.0 million-1.4 million barrels per day (mbpd).

Oil market analysts and experts also hint at 2 other probable scenarios as the Opec+ group, which includes allies Russia and Kazakhstan, discuss their future course after oil prices suffered their sharpest monthly drop since the global financial crisis in November.On Wednesday, Saudi Arabia and Russia were meeting for make-or-break preparatory talks that will set the direction for the oil market amid calls by several world leaders, including Donald Trump, to keep energy prices in check.

Crude gave up much of its gains on Tuesday following his comments, and fell as much as 2.1 per cent on Wednesday. Brent crude futures were down 22 cents on the day at $61.86 a barrel by 1312GMT, but above a session low of $60.80, while US futures had eased 6 cents to $53.19.

Ehsan Khoman, head of Mena Research and Strategy at MUFG Bank, said President Trump's vocal stance on permanently lower oil prices remains the last significant obstacle to the Opec+ cuts.

In the first scenario of between 1mbpd and 1.4mbpd cut, which has 60 per cent probability, Brent is likely to rise above the $70 per barrel by early January.

Under the bearish scenario of 1mbpd of production cuts, Brent is likely to fall below the $55 per barrel by early January, MUFG's Oil Market Outlook said.

"The US pressure in tandem with Russian objections against anything more than a mild production cut could signal to Opec+ agreeing to curb output by less than 1mbpd and thus lead to inventories considerably building. Moreover, Opec+'s ongoing frustration towards shale may drive greater debate around whether a further iteration of cuts is the right strategy as this will only accelerate additional market share losses to shale producers which are increasingly becoming operationally efficient with lower breakeven costs over time," said Khoman.

As per the bullish scenario of 1.4mbpd of production cuts, which has 10 per cent probability, Brent is likely to rise above the $75 per barrel by early January.

"The magnitude and duration of the production cuts are deepened (potentially more than the first agreement of 1.8mbpd back in November 2016), as well as potentially for a shorter timeframe (6 months), which could allow enhanced monitoring and more flexible reaction to market developments," said Khoman.

However, Saudi Energy Minister Khalid Al Falih cautioned in an interview Tuesday that a deal wasn't yet done, saying it's "premature" to suggest the Opec+ group will agree to curtail output. That's less bullish than statements he made a month ago in Abu Dhabi calling for one million barrels a day of cuts.

Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd, said there is little disagreement among Opec members over the need to cut, but there is not yet consensus over how much.

"Communicating a large cut, if one can be agreed upon, will still be fraught with challenges given complicated U.S.-Saudi relations."