Commodity Daily News

OPEC Holds Output Firm as Spot Crude Oil Prices rise.

As expected, OPEC agreed yesterday to hold its production quota steady for member nations, though a call was made for its members to comply with previously agreed production cuts. The price of crude oil is currently trading near $74.25 level after an opening day price of $73.70.

The member nations would like to see a drop in the supply of crude oil as the current price sits at a much more comfortable level for member nations who depend on the export of crude to drive their one dimensional economies. As demand for crude oil weakens, OPEC fears if production cuts are not met, there may be a lack of equilibrium for the supply and demand of crude oil, which could drive down the price. OPEC member nations are notorious for failing to meet their production cuts. Research shows OPEC nations fulfill only 60% of their declared production cuts.

Those traders who see the long term fundamental view of excess supply in the market may see an entry price of $75 to go short.