 OPEC decision helps oil recover
(China Daily)
Updated: 2008-12-19 08:01
Crude oil rose from a four-year low on speculation OPEC's record output cut will reduce surplus supplies next year. OPEC agreed that the group's 11 members with quotas will trim current production by 9 percent in an attempt to stabilize prices. Russia and Azerbaijan signaled they'd be willing to reduce supplies as well. Global stockpiles could fall as much as 3 million barrels a day in the first quarter of next year, according to Petromatrix GmbH. "The cuts will be more dramatic than the demand slump," said Eugen Weinberg, a senior commodity analyst at Commerzbank AG in Frankfurt. "From the fundamental point of view, oil is relatively cheap and should stabilize at these levels." Crude oil for January delivery rose as much as 84 cents, or 2.1 percent, to $40.90 a barrel in electronic trading on the New York Mercantile Exchange yesterday. It traded at $40.44 a barrel at 10:08 am London time. The contract expires today. The more actively traded February contract rose as much as 2 percent to $45.48 a barrel. Prices dipped to a four-year low yesterday after U.S. crude and fuel stockpiles gained and on concern OPEC members may not comply with agreed cutbacks. OPEC members agreed to trim current production by 2.46 million barrels a day to 24.845 million barrels a day from the start of next year. Oil prices have slumped more than 70 percent since reaching a record $147.27 on July 11, cutting oil revenue and creating budget shortfalls for OPEC nations. Agencies (China Daily 12/19/2008 page17) |
