Potential OPEC output cut inches up crude prices

21-Oct-08

Amidst the potential curtailment in crude oil output from OPEC nations, the oil prices inched up 3% giving a tad push to the global oil markets. US crude rallied $2.40 to settle at US$74.25/barrel and London Brent crude upped $2.43 to reach US$72.03/barrel. Two schools of thought are believed to be dominating the global oil markets. While the OPEC ministries are intensely debating to cut back oil output after the prices witnessed a serious downfall from US147/barrel in July due to ailing demand, the International Energy Agency (IEA) deems the oil output curtailment will lead to a delay in global economic recovery. Nevertheless, the oil prices are expected to remain volatile with some analyst forecasting them to slide down at US$50/barrel by end of 2009 after China-second largest consumer of oil-saw its economic growth push back to 9% in Q3 2008.