Oil Slips, Possible OPEC Production Cut is Shrugged Off
Oct 22nd, 2008 | By Doug Casey | Category: Financial NewsIn the energy market Tuesday, oil slid lower, with crude for November delivery closing at $70.89/barrel, down $3.36 on its last day as front-month contract. November reformulated gasoline fell 2.8 cents, to $1.6919/gallon.
“The dollar strength, expiration issues and usual trading activity has been pushing the market around, but it’s really going to gyrate on what OPEC announces and if the participants believe there will be any concrete follow through by them,” said Neal Ryan, of Ryan Oil & Gas Partners.
Ryan noted that “even bold announcements by [OPEC members] in the last few years have been greeted with a lot of skepticism in the market because of the lack of follow through or what I call ‘fun with numbers’ accounting they use.”
He concluded that, “The Saudis are the only member of the cartel with the production wiggle room to accomplish anything, so I’m doubting we’ll see anything more than the announcement of a million barrel cut, which the market will greet with further selling.”
Edward Meir concurred, writing that, “Even a cut of 2 million barrels a day will be outweighed by ‘the demand vaporization’ that’s taking place.”
Source: Oil slips - Possible OPEC production cut is shrugged off
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