October 20, 2006

...AND LOWER...:

OPEC Skeptics Push Oil Prices Lower: Oil prices fall in sign of traders' skepticism about OPEC's resolve to cut production (BRAD FOSS, 10/20/06, AP)

[M]any analysts believe the Organization of Petroleum Exporting Countries will have difficulty enforcing the production cut in its entirety because oil prices are still twice as high as they were just three years ago.

"It's clear there will be some production cutbacks. But is it going to be 1.2 million barrels? That's probably unlikely," said Andrew Lebow, a broker at Man Financial.

Light sweet crude for November delivery on the New York Mercantile Exchange fell $1.05 to $57.45 a barrel. In London, December Brent crude on the ICE Futures exchange declined by 52 cents to $60.35 a barrel.

Oil prices have slumped since July due to rising global supplies, a weaker-than-anticipated hurricane season and expectations for slower economic growth.

"The question now is whether OPEC members will comply with the new quotas or whether history will repeat itself and OPEC members over-produce," Global Insight analyst Simon Wardell said in a research note. "The markets appear to be betting on the latter."

Posted by Orrin Judd at October 20, 2006 2:21 PM

Isn't the real question whether we can keep prices high enough to bring the alternate energy sources on line. Been down this road before.

Posted by: jdkelly at October 20, 2006 6:30 PM

We are paying some of those worthy gentlemen DAMN GOOD MONEY to do what we want them to do. This is whether the payment is direct or indirect, as when we maintain the political arrangements which keep them in power. Think Kuwait.

Posted by: Lou Gots at October 20, 2006 10:07 PM

Lou, that's how the Roman thought about paying off the barbarians. Didn't work out for them too well.

Posted by: Chris Durnell at October 23, 2006 1:24 PM