OPEC must know something the rest of the world does not know. Its chief believes that crude prices will recover to $75 sometime this year.
Either OPEC expects to cut its supply by another 3 million barrels a day or it expects the global recession to end driving up the demand for crude.
The recession is not ending, but, according to Reuters, "OPEC is fully enforcing its deepest ever oil supply curbs, which should be enough to boost prices that have slumped below $40 a barrel," the group’s president said.
The cartel does not meet again until March, but, in the offing, there must be pressure from member states to double the price of crude to keep their economies from running multi-year deficits, compromising their social and infrastructure programs and eroding their global influence.
OPEC is going to cut again in March and the cut will be historic.
Douglas A. McIntyre
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