Last week, ahead of the OPEC meeting, BofA commodity analyst Francisco Blanch said the oil cartel faced three specific choices ahead of its May 25 meeting in Vienna, when it is widely expected to extend the November 2016 production cut:

1. First, OPEC could cut production beyond the 1.2mn b/d agreed in December and encourage non-OPEC members to deepen the cuts.
2. Second, OPEC could increase output aggressively and restart the oil price war.
3. And third, OPEC could keep the cuts at the current levels for the next 6 to 9 months and hope for oil market demand conditions to improve.

BofA also presented the following table adding the proposed likelihoods of any given choice of action, of which a simple deal extension had the highest probability of taking place.

It appears that BofA was right, because on Tuesday morning, Bloomberg reported, citing delegates, that the OPEC committee is currently studying three deal extension options: a 6-, 9- and 12-month extension. Bloomberg also reports that OPEC's Joint Ministerial Monitoring Committee will be studying these three options and will meet one day before the general meeting - ie on Wednesday. Committee members include Algeria, Kuwait and Venezuela, and non-members Russian and Oman.

Separately, confirming that further cuts will most likely not be announced, the Kuwait oil minister said today that OPEC is not considering deeper cuts, as they're not "necessary right now."

This is a problem because as calculated last week, OPEC needs as much as 1mmbpd in further cuts to rebalance the market by the end of March 2018.

As a remember, yesterday OPEC's secretary general said that consensus is building around a 9 month extension, which is also the base case of most sellside firms. Saudi has also voiced support for such a move: on Monday there were headlines that Saudi's energy minister was en route to Iraq to try to sway Iraq from a 6m to 9m view, with Iraq allegedly agreeing to the proposal. As a result, an announcement of anything different would likely provoke a market reaction.

Finally, for a detailed take on what OPEC's motive is - or should be - yesterday Goldman published an extensive note explaining why OPEC's target with the upcoming deal revision is not to push the price of oil higher, which would prove self-defeating as even more production comes online, but to push the oil strip deeper into backwardation, removing funding for US shale companies.

There has not been a notable move in the price of WTI on the news.