Crude Falls Ahead Of OPEC Meeting
Crude oil is lower in early trade Friday as traders book profits ahead of the weekend's OPEC meeting in Cairo.
At 8.30am GMT crude was 63c easier at $53.79/barrel. Crude oil futures have slumped 63 percent from a record $147.27 a barrel reached on July 11.
"OPEC members may consider a reduction at their meeting this weekend in Cairo to stabilize the market," said one OPEC member. "However recent cuts have done nothing to support prices, so why should it be any different this time?" asked one trader.
The trade remains sceptical that what OPEC says, and what OPEC does are frequently two different things. A promised cut of 1 million barrels usually means a reduction of 500-600,000 barrels in reality.
The Venezuelan oil minister said yesterday that the cartel aims to implement plans to evaluate compliance with the 1.5 million barrel a day cut from last month. But then again he would say that wouldn't he. Venezuela is having elections next year, and needs oil to be back up around $90/barrel to balance it's budget, analysts estimate.
Meanwhile, analysis from the Deutsche Bank shows that OPEC cuts traditionally take 3-6 months to impact on prices.
Data from the US Energy Dept. Wednesday showed US oil demand plunged 2.62 million barrels a day, the largest monthly percentage decline since August 1980.
The US is the world's largest oil consumer. It is hoped that demand will now slowly start to improve, lifting prices from three-year lows, after the US government promised $800 billion to help unfreeze credit markets
At 8.30am GMT crude was 63c easier at $53.79/barrel. Crude oil futures have slumped 63 percent from a record $147.27 a barrel reached on July 11.
"OPEC members may consider a reduction at their meeting this weekend in Cairo to stabilize the market," said one OPEC member. "However recent cuts have done nothing to support prices, so why should it be any different this time?" asked one trader.
The trade remains sceptical that what OPEC says, and what OPEC does are frequently two different things. A promised cut of 1 million barrels usually means a reduction of 500-600,000 barrels in reality.
The Venezuelan oil minister said yesterday that the cartel aims to implement plans to evaluate compliance with the 1.5 million barrel a day cut from last month. But then again he would say that wouldn't he. Venezuela is having elections next year, and needs oil to be back up around $90/barrel to balance it's budget, analysts estimate.
Meanwhile, analysis from the Deutsche Bank shows that OPEC cuts traditionally take 3-6 months to impact on prices.
Data from the US Energy Dept. Wednesday showed US oil demand plunged 2.62 million barrels a day, the largest monthly percentage decline since August 1980.
The US is the world's largest oil consumer. It is hoped that demand will now slowly start to improve, lifting prices from three-year lows, after the US government promised $800 billion to help unfreeze credit markets