Additional cut by OPEC imminent: oil prices hover around US$44

10-Dec-08

A barrel of light, sweet crude for January delivery inched up to US$43.90 on the New York Mercantile Exchange after falling by US$2.90 earlier. Prices have paused at US$44 as investors wait for the quantum of expected reduction in production by OPEC in a bid to stabilize crude prices that have fallen by about $100 in five months. Investors are on the look out for any signals by OPEC of the quantity by which output quotas are to be reduced at a meeting next week in Algeria. Investors have also found encouragement in the news that President-elect Barack Obama plans to implement a major infrastructure program to help boost employment in the weakening US economy. With all the stimulus packages and output cuts by OPEC, oil price may stabilize. Earlier, OPEC had announced a production cut of 1.5 mln bpd in October and 500,000 bpd in September.