Commodity Daily News

Crude Oil Prices on the Rise in Light of Production Cuts

Crude Oil prices rose for a third day as signs that the Organization of Petroleum Exporting Countries (OPEC) will begin to cut output from 1 to 2 million barrels a day in stages, starting this week, in order to stabilize prices. Reducing Crude Oil output will be heavily debated as a possible way to increase Crude Oil's price in the last few months of 2008. In addition, forecasts of colder weather in the U.S. Northeast also supported this expectation as it will lead to a rise in demand for heating oil.

Signs that the global credit crunch might be easing, as well as comments by U.S. Federal Reserve Board Chairman Ben Bernanke urging more government spending, prompted renewed hopes that the worst of the financial crisis may be over, lending support to Oil prices. Traders may look for another rise in value, potentially reaching into the $75-$80 range before day's end if this trend continues.