OPEC Production Cut Looks Inevitable

Excerpt from our One-Page Annotated News Summary:

Indonesia Joins Call for Opec Production Cut (Financial Times)

Summary: Indonesia is the latest OPEC member to publicly announce support for a cut in oil production, joining Iran, Kuwait, Libya, Nigeria and Venezuela. The nation's OPEC governor stated, "OPEC policy is to stabilise price. Indonesia will have no problem if OPEC were to cut production." OPEC meets in mid-December in Nigeria. At this point no formal decisions have been made regarding production but all members seem to agree that there is a global oversupply and that at least 1 million barrels or 4% needs to be cut. An OPEC official commented, "Opec is going to defend a price floor for its oil of $50-$55 a barrel." OPEC members are reportedly most concerned about Q2 next year when a sizable capacity glut is projected.
Related links: Full article • Oil Prices Decline on Increasing Supply • Discussions on Oil • Inflated Oil Prices: Your Tax Dollars at Work • OPEC Denies it will Cut Output • The Significance of Oil's Drop Under $60
Potentially impacted stocks and ETFs: Energy Select Sector SPDR ETF (XLE), U.S. Oil Fund ETF (USO), Oil Service HOLDRs ETF (OIH)

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