Mild weather and large US oil supply continue to push OPEC to the production cut as oil trade dropped below $56 a barrel. OPEC previously cut production twice and third is less than 1.2 million goal for October. ``What is really driving oil down is the large spare capacity because of the lack of a cold snap in the U.S.,'' said Steve Rowles, analyst at CFC Seymour Ltd. in Hong Kong. ``There is a lot of skepticism in the market that OPEC will be able to deliver'' the production cuts.
OPEC is pumping around 40% of the worlds oil share and last month according to Bloomberg researches cut around .08% of output. Five straight months OPEC cut production 1.3Million barrels since July 06.
``OPEC has a lot of work to do if it wants to support prices,'' said Tom Hartmann, a commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``At the end of the day, we may see that they don't have the ability to do so.''
OPEC will "most likely" wait until then before reviewing production again, spokesman Omar Farouk Ibrahim said yesterday. Calls for an extraordinary meeting before the next scheduled gathering in Vienna on March 15 are "premature," he said.
Vladimir Dubchak
www.efamilyfinance.com
Posted January 9th, 2007 by vladdubchak
