As oil prices fall, OPEC wavers on production cuts [Globe and Mail]
Summary: As of Wednesday, OPEC ministers were still unable to come to a consensus regarding production cuts. The cartel is looking for a way to stablize falling oil prices, which are now at $57.59 a barrel on the NYSE for West Texas Intermediate crude. This the lowest price for near-month futures since last December. Saudi Arabia seems to be dragging its heels on this decision, in attempt to reduce or completely avoid American political pressure. The kingdom is looking for other OPEC players like Qatar to take the lead in this decision. It is unclear whether OPEC will make its 1 million barrel a day cut from its actual production or from its offical quota, which is higher. Analysts conjecture that since output is already below quota levels, the planned cut would have to come from actual production for it to have any effect on oil prices.
Related links: Oil Traders Testing the OPEC Cartel • OPEC Production Cut Looks Inevitable • Reuters: UPDATE 1-Formal OPEC deal on 1 mln bpd cut due soon-Qatar • Bloomberg:Crude Oil Rises on Speculation OPEC Members Will Cut Production
Potentially impacted stocks and ETFs: ETFs: U.S. Oil Fund (USO) HOLDRS Oil Service (OIH) Stocks: ExxonMobil (XOM), Chevron (CVX), ConocoPhillips (COP), BP (BP)
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