NEW YORK (TheStreet) -- OPEC's days of near unilateral control of oil markets and prices appear to be numbered.
The group may be so marginalized that any decision it makes at its meeting on Thursday will have a negligible effect on oil prices long term. But any change in production quotas should affect prices in the short term, perhaps resulting in a pop of $2 to $3 a barrel if the cartel raises its quota, or a continued decline in the price of oil the quota is kept the same.
Must Read: 12 Stocks Warren Buffett Loves in 2014
Short-term traders may want to hedge their bets by employing a "straddle" strategy, in which a trader holds both a put and call option with the same strike price. A put option is a bearish bet that gives a trader the right to sell a security at a set price, and a call option gives him the right to buy it a set price. A straddle trade may be appropriate if a trader is uncertain which direction a security, in this case oil futures, is headed.
Longer term, investors should count on oil trading below $100 a barrel. The consensus is that Organization of Petroleum Exporting Countries is fragmented, with some members pressing to abate production to help shore up prices, while Saudi Arabia and Kuwait, two members that can balance their budgets with oil reportedly as low as $83 and $60 a barrel, seem to be content to keep production at current levels. This balkanization has left analysts divided on what OPEC will do on Thursday.