OPEC Cuts Have Buoyed Price, But At A Cost

Organization of Petroleum Exporting Countries crude oil output cuts have succeeded in stabilizing prices, but likely haven’t cut deeply enough into global stockpiles to sanction a production increase at the group’s Sept. 11 meeting.

“As I see it at this time, there’s enough crude in the market,” OPEC’s Secretary General Abdalla El-Badri said Tuesday.


He appeared to hint that OPEC will officially keep output restraints in place when it meets at its Vienna headquarters in less than two weeks and take up the issue again at its scheduled Dec. 5 meeting in the United Arab Emirates.

“We’ll review the market and we’ll see what we can do in September, but the picture at this time is not clear. It will be clear to me in December what’s going to happen in the American economy,” he said, referring to unfolding credit crunch that has sparked fears of an economic slowdown.

Traditional price hawks Iran and Venezuela have in recent days called for OPEC to continue output restraints. OPEC’s de facto leader, Saudi Arabia, the world’s biggest oil exporter, typically has yet to tip its hand ahead of the meeting.

Dow Jones Newswires