OPEC countries are rallying again to discuss further cut in oil production which would mark the second time in the past three months. However, speculations are high that the probable cut in oil production will not come into effect immediately. Moreover, the uncertainty being created by delaying the process may affect the international market negatively. On the other, crude oil prices continued to rise in New York following the speculation that OPEC will decide to production cut next year.
Under the proposals being discussed by the OPEC is would cut short the production by 500,000 barrels a day in order to keep the target production of 25.8 million barrels per day. In the meanwhile, officials have indicated that the cuts may be deferred probably to February next year. OPEC ministers are scheduled to meet today to discuss the proposal and there is also being speculated that the ministers could still choose to keep the production at current level.
The recent proposal is just an extension of their policy to constrict the oil supply to sell it at their desired prices. Oil inventories world wide are falling sharply in response to OPEC’s previous production cost. OPEC has indicated many a times that they want to keep the oil prices somewhere at $65 per barrel or more. And of course, to achieve this they would try in all probability to constrict the oil supply.
On the other side, few experts have opined that the production cut may not even take place. They have suggested that the deferred cut may be dubbed as unusual but it of course not unprecedented by the OPEC. They have based their optimism on the fact that world’s oil market may change by the scheduled time and it may influence OPEC countries to not to go for the production cut.
