Crude oil rose from a seven-month low after a report that the Organization of Petroleum Exporting Countries may reduce output to halt a decline in prices OPEC members including Kuwait, Iran, Venezuela and Nigeria. OPEC is getting more serious and has agreed informally that it needs to cut production by at least 1million barrels a day that is at least 4 per cent â in order to boost the falling price of oil. Hong Kong-based analyst at CFC Seymour Ltd. Said that a 4 % cut will have a dramatic impact on supply. Crude oil for November delivery rose as much as 79 cents, or 1.3 percent, to $60.20 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $59.95. Oil yesterday closed at $59.41 after touching $57.75 a barrel, the lowest since Feb. 16. Futures have declined 24 percent from the record $78.40 a barrel on July 14 Saudi Arabia is unhappy with the move toward voluntary cuts, the newspaper reported{Financial Times}. Even so, OPEC's biggest producer has reduced output by 200,000 barrels a day over the past two months, it said. Kuwait's Oil Minister Sheikh Ali-Jarrah al-Sabah said yesterday his country will support a cut in production ``if it's for the benefit of the market.'' Nigeria and Venezuela said last week they will cut production by a combined 170,000 barrels a day in response to the slide in oil prices since mid-July. U.S. refineries operated at 89.9 percent of capacity last week, the lowest since May, according to the Energy Department. Analysts had expected refineries to operate at 91.6 percent. If the prices fall with the same speed in the future then the action take by these countries will be effecting the world economy because these few countries produces major portion of the world total fuel production
But, quoting myself from another thread: So much for a short squeeze when OPEC announced a cut in production. LOL Just watching the tape the last few weeks it seemed like bigger players were unwinding shorts below 62 down to 60 especially. Maybe OPEC will cut more after the Novermber elections and try to drive the price higher.