OPEC is not an organization that likes to leave money on the table. And, it has done so for far too long, at least according to a number of its members.
Recently, banks in Saudi Arabia and Kuwait had to be bailed out by their governments. Iran claims it cannot balance it budget unless crude is at $90 a barrel.
When OPEC cut production by over a million barrels a day last week, crude prices actually fell, a humiliating experience for countries in the cartel who are used to moving oil prices.
The next meeting of OPEC is scheduled for December, but with the price of oil still stuck well under $70, production may be cut again very soon.
According to Reuters, "OPEC Secretary General Abdullah al-Badri said if prices continued to fall, OPEC would call another extra meeting."
With demand slipping in the major consuming nations and an astonishingly low consumer confidence index in the US, look for OPEC to cut, and cut sharply within the next two weeks. It should not be a shock if the cartel takes another two million barrels off the market.
OPEC needs oil prices back at $80, or higher.
Douglas A. McIntyre