OPEC Calls for Emergency Meeting -- Can Members Agree How to Cut Output?

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Oil Climbs to $59 as OPEC to Meet Oct. 19 on Cut [Reuters]

Summary: At this Thursday's emergency meeting OPEC members will likely discuss how (and when) to implement a cut in production in order to counter a sharp fall in oil prices since a mid-July peak of $78.40/barrel. Since then, prices have fallen in 10 of the last 13 weeks. It is mostly agreed among members that 1 million barrels per day of output, or 4%, needs to be cut in order to counter falling prices. OPEC president Nigerian oil minister Edmund Daukoru said earlier this month that oil below $55 was a "trigger" for action. This could be OPEC's first production cut since April 2004, but over the past week the discussion has become focused on whether to cut real output or its notional ceiling, and what impact quotas will have. Daukoru says, "The time to do something is... now because we don't know where the floor of this drop will end."
Related links: Oil Economics in a Nutshell • Oil: Prices and Producers -- Where They're Headed • China's Oil Demand in Perspective • OPEC Waffles on Production Cut
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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