OPEC appears to be ready to do nothing. It probably will not raise oil production despite pleas from Western countries and China to do so. The argument is that oil went below $90 on its own. It was just nasty speculation that took it up.
But, that is not entirely true, and OPEC members know it. Some of the oil ministers who are members of the cartel began talking about increasing supply about two weeks before their big meeting. Now that the party is underway, word is that doing zip is the best thing of all.
So, oil is up over $2, back above $90 and moving North.
The OPEC members know that when they talk about moving supply up or down, it is speculation. Hedge funds don’t have to do the work that oil ministers will do for them.
OPEC won’t raise production because the threat of $100 oil has not crippled the world’s economy, yet. So the profits which the oil producing nations bring in each day are going to stay high.
If and when global GDP starts to drop, driving demand for crude down. OPEC will increase production. And then the cycle of moving oil prices down so they can go back up again in a few months will begin again.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks