OPEC members, including Saudi Arabia, have budgetary break-evens near or above current prices and that should be a factor in their decisions.  But street views vary on whether members of the Organization of the Petroleum Exporting Countries can agree among themselves on a production cut since Saudi Arabia has been signaling it will protect its market share and that it won't be the only country to shoulder production cuts.  Kilduff said part of the volatility stems from the various views, with some firms seeing no cut at all. He is in that camp.  "If they don't cut, prices will fall precipitously, straight down through $70 in rocket fashion," he said. "There's a lot evidence out there with people buying the straddles ... that means people don't know which way it's going to go but it's going to go a long way in either direction."  One popular call has been to buy the March $75 straddle, he said. "You're buying the March 75 put (options on WTI futures) and buying the March 75 call with the idea that prices are going to go a long way from $75—one way or the other," he said.  Daniel Yergin, vice chairman of IHS, does not expect OPEC to cut production at this meeting.  "I don't think any of the members of OPEC are going to be giving thanks on Thanksgiving Day because to them what happened in the oil market is a real shock," he said.  While oil prices had been higher than supported by fundamentals before the $30 decline, he said OPEC members have been surprised by how far crude has fallen. "They're worried it will fall further, so I think this OPEC meeting is just a first stage in terms of them adjusting to what is a new reality in the world oil market."  The surge in U.S. oil production has added more crude to world markets at a time when demand growth has slowed. Yergin said the signals so far are that there will not be an agreement at this meeting, unless something very dramatic happens.  Yergin said OPEC is a fractured organization, with some members, like Venezuela, more desperate for higher prices. "I think the Saudi position is different than the other countries because what they want to do is defend their market share," he said, noting the Saudis want to see real cut backs from the other producers.  Whether it's now or later, production cuts will only come when there's a real panic among members.  "I think at this point there are a lot of barbs going back and forth," Yergin said.  "I think the recognition is really there, now that this boom in the United States is not going away," he said. U.S. production reached 9 million barrels a day this month, a level last seen in 1986 and a million barrels more than a year ago.  Blanch said OPEC's strategy will be to keep markets volatile, and by doing that they will be hurting some U.S. shale production. He said Saudi Arabia needs oil prices above $90 to meet its budget, though some estimates are lower.  "Part of the strategy is going to be creating volatility in the market and being confusing, and obscure what they're going to do," he said.  Read MoreRussia has little to offer in oil price war  Blanch said the shale boom was driven by credit, and some marginal players are already being sidelined.  "By keeping prices more volatile, you slow down fixed income investment into the energy sector," he said. Saudi Arabia is also more nimble than the diverse group of producers that drove the U.S. oil boom.  "They can respond faster to price fluctuations and demand fluctuations than shale producers. A shale producer needs six months to a year, and in two to three months, the Saudis can respond ... they have the upper hand," said Blanch.  Other recent periods when OPEC cut production were in 2008-2009 during the financial crisis, in 2001 and in 1998-99.  "They only need to cut a little to change market direction, get all the shorts out of the holes," Blanch said.  U.S. production growth at current levels of around $76 per barrel would be 500,000 barrels a day next year, half of this year's growth, according to BofA. A drop to $60 would leave production flat.  Blanch said the Iran situation may continue as it has been. Iran has been crippled by sanctions during the stalemate with the West over its nuclear program.  He said even if it does settle, and oil production increases, Iran does not have that much more capacity because of a lack of investment in its operations.  Read MoreIran is stalling as nuclear deadline looms
Oil gushed higher on China's surprise rate cut but also as traders increased bets that OPEC will cut production when it meets on Thanksgiving Day.