A statement from Saudi Arabia's oil minister that further OPEC productions cuts were not necessary right now have caused oil prices to plunge to 19 month lows. After the dip, prices recovered slightly, but continue to remain below US$%2. Light sweet crude futures for February delivery rose 23 cents to $51.44 in midmorning Asian electronic trading on the New York Mercantile Exchange, from its Tuesday settlement of US$51.21.
The market players voice OPEC's failure to meet the earlier announced production cuts and are of the opinion that OPEC first needs to follow through on reductions they have already announced. OPEC has committed to a total cut in output of 1.7 million bpd, including a 500,000 bpd reduction set to begin Feb. 1. Independent surveys suggest OPEC has cut output by little more than half of its pledged levels. Production remains near 27 million barrels a day or about 700,000 bpd above OPEC's target.
17-Jan-07 
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