If you have been wondering if OPEC was going to cut production due to prices, the answer is a resounding "YES." It has been about as telegraphed as the sun coming up from the east tomorrow. But we now have an idea about what lies ahead.
Ali Naimi, the Saudi oil minister, noted that the daily productioncuts would be about 2 million barrels per day.
Interestingly enough, this production cut is not taking oil higher.The estimates for a cut have been roughly 2 million barrels per day.So this is what was largely expected.
The one thing this is expected to do is to stabilize prices and to keepthat free-fall of the last 5 or 6 months from continuing to the pointthat all of a sudden the profits aren’t there.
Jon C. Ogg
December 16, 2008