OPEC president sees more oil supply cuts Fri Dec 1, 2006 9:16 AM ET By Tom Ashby ABUJA (Reuters) - OPEC will probably trim oil supply again when it meets on December 14 although existing curbs are starting to remove some of the world's surplus, the producer group's president said on Friday. Nigeria's Edmund Daukoru told Reuters the volume of the reduction will depend on circumstances at the time, but oil's rally this week and a decrease in fuel stockpiles will influence the group's decision. "There is likely to be further trimming. The actual amount would depend on circumstances," said Daukoru. "What we are seeing now will definitely influence our decision on how much to cut." The price of U.S. crude has risen by nearly $6 a barrel to just above $62 since the Organization of the Petroleum Exporting Countries agreed at an emergency meeting in October to cut output by 1.2 million barrels per day (bpd) from November 1. "(The price rise) is not too much of a surprise, because the cuts announced took time to manifest and for the compliance to be noticed by the market," said Daukoru. "I am happy to see prices have firmed somewhat. I am beginning to be happy, but not fully happy." A Reuters survey showed 10 OPEC members bound by output curbs honored two thirds of their agreed cut during November. Supply was still nearly 600,000 bpd above a target of 26.3 million bpd. "With the drawdown in stocks, the cuts are beginning to work," said the OPEC president. U.S. crude fell to a 17-month low of $54.86 on November 17, a level which Daukoru said would not allow producers to invest in bringing on new oil. "Plans to install new capacity would have been in jeopardy if prices had stayed at the level they were two weeks ago."
what makes you so sure ? you must be long crude from somewhere good luck ! ( I actually hope it goes a bit higher ... to help my junk silver coins go up in price )
Supply cuts do not make price go up. The fear of not having enough spare capacity is what makes prices go up. This is why this rally could be short lived. Knowing that OPEC can turn back on the spickets when prices go back up... will keep prices from going back up. I don't know where oil is going. But I'm pretty sure that opec supply cuts are not having an effect on the price. 5-15 day forecast is looking above average.
Its all about knowing the industry and people. The Saudis are nice guys and dont do business like Iran. Iran and Venezuela come out shaking the sword. Nigeria pays off the rebels to attack the pipelines. The Saudis come out and start telling everyone that the United States is "well supplied". So what does this mean exactly? It means they are going to cut production and they are saying it nicely. You have to understand the oil industry which has lost money for years. They just want to get their cut like everyone else. They see many industries thriving and theirs just isnt. Every oil producing nation has gone through bad times and needs the barrel to be at a certain price especially now that they have turned up development in their respective countries. If oil goes below $60, no one makes any cash. Everyone has their little way of doing things. Bush says he needs to fill up the SPR keeping more crude off the market, Iran comes out every Sunday talking about nuclear bombs to stimulate the Monday oil trading, the Saudis come right out and say we need to cut, etc. The American oil companies will shut down a refinery or a well stating the need for maintenance. Nope, your kidding, those wells and that refinery doesnt need any maintenance. The excuses go on and on. In fact, the Saudi Arabian oil minister had come out directly a month ago and stated that they need it above $60 because, otherwise, it would restrict development. The bottomline is that they panic when that number goes under $60. They need it in the mid-60s and it will test $70. In fact, if and when it tests $70, that might become the new floor. There is no way I see oil in the 50s, no way. The only way you guys can save yourselves now is not to buy stocks like Apple and Mastercard, but to get long in oil. Its the only play in the market at the current time that I see as a huge up. It was tech over the summer, but now its oil. T-Boone Pickens October 2006 "70 before 50"
eagle... don't we all have an oversupply right now, and OPEC is cutting production til we reduce current inventories a bit? I'm not arguing that oil will go up higher, but I'm not sure oil stocks will benefit all that much in the short run if we have a big glut of inventory to work thru first...