In a magnaimous gesture, OPEC is not likely to cut oil supplies for the near-term future. It is an odd turn of events because supply in the US is at a 13 year high.
The majority of OPEC members appear to be concerned that raising prices during the Winter, when demand is up, could hurt the global economy, and, perhaps their income.
Some analysts feel the that market will tighten itself in 2007 due to rising demand from China. Under those circumstances oil prices should rise on their own.
Many of the Middle Eastern countries may also be concerned about unrest in their region. I would be unpleasant for them if the US were to decrease it military presence in the region. That, of course, has nothing to do with their support for not cutting crude supply.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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