Infowars.com
PrisonPlanet.tv
Listen Now
OPEC’s record production cuts are draining the glut in world oil markets, leading traders to bet that $50 crude is two months away.
Ever since oil began its 69 percent plunge from a record $147.27 a barrel in July, traders have been looking for a bottom. Now that the Organization of Petroleum Exporting Countries reduced supplies 13 percent since September, inventories are falling 1.4 million barrels a day, according to PVM Oil Associates Ltd., the world’s biggest broker of energy trades between banks. OPEC will limit exports again when the group meets March 15, according to a survey by Bloomberg News.
OPEC states have more of an incentive than ever to restrict output because the combination of declining prices and the global recession will reduce earnings 59 percent this year to $402 billion, according to the U.S. Energy Department. Crude demand will drop for a second year, the first back-to-back decline since 1983, the International Energy Agency said.
OPEC’s cutbacks are “enough to address the surplus,” said Harry Tchilinguirian, the senior oil analyst at BNP Paribas SA in London. “If they do more and try to pursue a price target too aggressively, there’s a risk of over-tightening the market when the economy is weakening, stalling the recovery.”
Expectations for a rally gained as oil for April delivery rose for a second day, advancing as much 7.3 percent to $48.83 a barrel on the New York Mercantile Exchange. The contract, which rose 1.7 percent last week after jumping 12 percent the previous week, traded at $47.61 at 11:18 a.m. local time.
