Crude Oil Prices Shrink as OPEC Delays its Decision to Cut Production
Posted on 02. Dec, 2008 by admin in Crude Oil, Forex News
Crude Oil prices descended bellows $49.00 a barrel yesterday after the Organization of Petroleum Exporting Countries (OPEC) delayed their decision on new supply cuts until later this month. Crude prices have tumbled since July as the economic crisis reduced demand in the United States, and other large energy consuming nations. Following their meeting last week, the OPEC cartel has agreed to trim 2 million barrels per day from production since September. Crude Oil prices have tumbled 67% since reaching a record $147.27 a barrel in July as the U.S., Europe and Japan faced simultaneous recessions; an event not seen since World War II.
Apparently there isn’t much OPEC can do to stop the free fall in oil prices, as a weakness in the manufacturing sector foretells a further demand slump for Crude Oil. OPEC Secretary General Abdalla el-Badri said that the group will reduce oil production when it meets in Oran, Algeria, this month on December 17. Since the global market is already oversupplied, the Secretary General said Crude demand is likely to drop even further in 2009. Analysts say that this postponement by OPEC’s policy-makers to reduce output, combined with the negative economic outlook, might send Crude Oil prices even lower than $40 a barrel by the end of this year!
