Oil prices sank to their lowest level in eight months as doubts flooded the market about OPEC's decision to cut output. Light sweet crude for November delivery on the New York Mercantile Exchange declined by over a dollar to US$58.52, the lowest close since Feb. 16. November Brent crude at London's ICE Futures dipped to US$59.79 a barrel.
The 1 million bpd cut sought by some OPEC members is unlikely to be implemented as it does not appear to have the support of Saudi Arabia, the cartel's largest producer. OPEC is not scheduled to meet until December, though there is talk of a possible emergency meeting before then. The last time OPEC trimmed its output - by 1 million barrels a day, was December 2004 when oil traded slightly above US$40 a barrel. Interestingly, even after the recent 25% decline, prices are twice as high as they were three years ago. After peaking at US$78.40 in mid-July, oil prices plunged due to rising worldwide inventories and concerns about slower economic growth, as well as the mild Atlantic hurricane season.
11-Oct-06 
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