European stocks are treading water ahead of OPEC’s latest meeting

File photo of a worker walking past a pump jack on an oil field owned by Bashneft, BashkortostanThomson Reuters

LONDON — European stocks are broadly flat on Thursday morning as market participants brace themselves for the latest meeting of the oil producers cartel, OPEC.

Most analysts expect the cartel to extend production cuts for another six to nine months following recent statements from major oil players.

Earlier in May, both Saudi Arabia and Russia, which is not a member of OPEC but is seen as a critical part of any potential agreement, said they backed extending the production cuts until March 2018.

However, OPEC meetings are unpredictable affairs with internal politics often making decision making incredibly difficult. Consequently, markets are flat in anticipation.

Just before 8.20 a.m. BST (3.20 a.m. ET) no major bourse has moved more than 0.6%, while most indexes are up between 0.05% and 0.4%. Here is the scoreboard:

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Writing in an email early on Thursday morning, FXTM analyst Lukman Otunuga notes:

“Oil prices were heavily supported this week by the growing optimism over major oil-producing countries working together to eliminate oversupply woes. With markets widely expecting OPEC and Non-OPEC members to extend the current output cut deal by another nine months, compliance is likely to be the main focus of today’s meeting.

“With compliance still a grey area, it will be interesting to see if OPEC enacts penalties in the new deal to prevent other members from cheating or going against the agreement.”

In Britain, the FTSE 100 is coming close to a new record all-time high of 7,533 points. No share on the index has gained more than 1.4%, with budget airline EasyJet and investment company Hargreaves Lansdown up 1.34% and 1.30% respectively. The index is up just 0.04%.