Re: OPEC reportedly agrees to production cut
On Oct 11, 2006, at 12:02 PM, Marvin Gandall wrote:
the Saudis’ dithering over an OPEC production cutback
OPEC always has the damndest time engineering production cutbacks.
And it’s not clear that SA’s interest would be in maintaining $70+
prices - high prices are bad for financial markets, where they invest
a lot of their revenue; reduce demand by slowing economic grwoth; and
encourage the development of alternatives. $50 might be a more
agreeable long-term price.
- particularly the timing of such a move - even though the latter is where US influence on the oil market has historically
been most evident. The OPEC cuts are slated to begin at the end of
October so that the impact of any price bounce will be felt after the election,
If the announced cutbacks are credible and large, then the oil market
will react almost instantaneously, not with a lag of weeks or months.
not before. It will be interesting to see whether GS follows suit by
restoring the weighting of gasoline futures in its commodity index
By the way, they announced the re-weighting months in advance.