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OPEC members not complying with diktat of reducing supplies
10 Dec '08
2 min read
Amid collapsing prices due to a slowdown in demand and news of recessionary trends extending in to the summers of 2010, countries of the OPEC have cut output by around 800,000 barrels per day (b/d) in November. The largest reduction in production came from Saudi Arabia which saw average production falling to 8.65mn b/d in November from 9.2mn b/d in October.
At a meeting held on October 24, OPEC had declared its intention to reduce crude oil output by 1.5 million b/d, but seems to be a distance away from the targeted figures. But at a recent meeting held in Cairo, Egypt on November 29, the ministers decided not to go ahead with the cut till they meet again on December 17 in Algeria.
Russia till date which never followed the dictates of the OPEC advisories is slowly coming around to the thought that amidst slowdown and falling prices it is more prudent to cut output rather than bring immense harm to the economy as it income goes down with a fall in prices.
Meanwhile, today the Asian market closed slightly higher than yesterdays closing. January WTI closed at $43.01/bbl up 94 cents and January BRENT $42.38/bbl up 85 cents. Crude futures strengthened on Wednesday afternoon in Asia, after falling 4% yesterday. Prices had fallen on Tuesday on expectations of lower US energy demand.
Oil prices in the European markets fell yesterday in spite of several attempts to add to the previous day's gains again on reports of low demand for the oil in the coming months. January WTI closed at $42.50/bbl, down $1.21/bbl., while January BRENT fell to $42.20/bbl, down $1.22/bbl
At a meeting held on October 24, OPEC had declared its intention to reduce crude oil output by 1.5 million b/d, but seems to be a distance away from the targeted figures. But at a recent meeting held in Cairo, Egypt on November 29, the ministers decided not to go ahead with the cut till they meet again on December 17 in Algeria.
Russia till date which never followed the dictates of the OPEC advisories is slowly coming around to the thought that amidst slowdown and falling prices it is more prudent to cut output rather than bring immense harm to the economy as it income goes down with a fall in prices.
Meanwhile, today the Asian market closed slightly higher than yesterdays closing. January WTI closed at $43.01/bbl up 94 cents and January BRENT $42.38/bbl up 85 cents. Crude futures strengthened on Wednesday afternoon in Asia, after falling 4% yesterday. Prices had fallen on Tuesday on expectations of lower US energy demand.
Oil prices in the European markets fell yesterday in spite of several attempts to add to the previous day's gains again on reports of low demand for the oil in the coming months. January WTI closed at $42.50/bbl, down $1.21/bbl., while January BRENT fell to $42.20/bbl, down $1.22/bbl
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