Oil Drop Opec Hint’s More Cut

Discussion in 'Energy Futures' started by bapunagar, Oct 24, 2006.

  1. Top world oil exporter Saudi Arabia informed its Asian and US customers that there would be less supply from next month. Oil fell on Monday as traders doubted all OPEC members would follow Saudi Arabia's lead to curb output under an agreement reached last week. OPEC's pledge to implement its first formal output cut since 2004.

    Prices of crude settled down to 52 cents reaching $ 58.81 a barrel. OPEC on Friday agreed to remove a total of 1.2 million barrels per day (bpd) of oil from over-supplied markets.

    The market is challenging OPEC, some people also feel that OPEC could start cheating people before the cut even takes effect. US president George W Bush warned OPEC to understand that high prices of oil would shatter economies and reduce demand for their products.

    Some OPEC ministers also said that another cut of 5,00,000 barrels could follow when the members meet next in Nigeria in December, But OPEC President Edmund Daukoru also said on Monday that it was too early to decide if the cartel would have to trim production in December.