Oil Production getting Cut by OPEC
Oil prices talk of a cut have rebounded from four-year lows. That’s after Opec’s president said the oil cartel could announce a large cut in oil production.
US light, sweet crude rose $2.90 to settle at $43.71 a barrel, while London’s Brent added $3.68 to $43.42.
According to CNN
NEW YORK (CNNMoney.com) — The Organization of Petroleum Exporting Countries, in a bold but not unexpected move to prop up falling oil prices, said Wednesday that it would cut production by 2.2 million barrels a day starting next month. The cut is the largest ever announced by OPEC.
OPEC hopes the cuts will stabilize prices, which have dropped by more than $100 a barrel since reaching a record high in July. The worsening economic downturn has sapped demand worldwide.
But traders were unmoved by the production cut, which had been widely expected. U.S. crude for January delivery sank $3.54 to settle at $40.06 a barrel on the New York Mercantile Exchange.
That’s the lowest settlement price since July 13, 2004, when oil settled at $39.44.
After the OPEC announcement, prices fell $2.10 to $41.50 a barrel. Oil had been as high as $45.50 earlier in the day.