Commodity Daily News

Output Cuts Claimed to Produce Results

The Organization of Petroleum Exporting Countries (OPEC) has recently claimed that their previous production cuts have begun to take effect and the price of Crude Oil has continued to hold strength. Finding support in the $40-50 price range, the price for a barrel of Crude Oil has finally stabilized, according to the cartel, and further production cuts will not be necessary since expectations are for demand to begin increasing by 2010.

Various accounts have been given for what a reasonable price for Crude Oil might be, and a few oil ministers from within the cartel are aiming for a price range near $70 a barrel. The expectation is for the price for Crude to hold within the current range until the recession begins to ease and demand picks back up. Once achieved, the price of Oil should climb back towards the $60-70 price range by early 2010. However, without accomplishing an economic turn-around, prices may drop once more and OPEC could consider a further production cut towards the end of this year.