Unless oil prices melt down again this week, Opec will not cut production at this weekend's informal meeting in Cairo and instead will wait until the cartel's gathering in December to reduce output quotas by 1m to 1.5m barrels a day, says Mike Wittner, global head of oil research at Société Générale.

Mr Wittner says that Opec simply does not have enough information on the effectiveness of the production cuts that it has already made, or sufficient feedback from its customers, to proceed with further reductions in output. "We see (a decision to maintain current production quotas) as a 60-40 probability and the outcome of the meeting could easily be affected by price action this week," says Mr Wittner, who notes that signals from Opec have been mixed so far.

Mr Wittner says tanker tracking data suggest there has been a "very significant cut" in Opec's oil production in November, down 1.2m barrels a day compared with October.

But SocGen says fundamentals will be perceived to be weak until the market becomes convinced Opec has cut supplies, given that a tanker requires six weeks to travel from the Persian Gulf to the US. Only then will November's cuts appear in lower crude imports and stocks, which is what the market wants to see.

"Oil prices will remain susceptible to further deleveraging (by hedge funds) and caution remains the order of the day," concludes Mr Wittner.