Yergin: Oil users will have more impact on price

The direction oil prices take will depend more on a meeting of world leaders in London next month than on what the Organization of Petroleum Exporting Countries decides this weekend, said Daniel Yergin, chairman of Cambridge Energy Research Associates.

Efforts to boost global growth will be more meaningful to oil markets than whether OPEC decides to cut oil output because prices reflect the economic slowdown, Yergin said in an interview Wednesday at the Futures Industry Association annual conference in Boca Raton, Fla., where he’s scheduled to speak today.


“GDP is going to determine the price,” said Yergin, author of a Pulitzer-Prize winning history of oil. “We’re now in the Great Recession, and that’s what the price reflects.”

Oil has fallen more than $100 from a high of $147.27 a barrel on July 11, closing at $42.33 Wednesday on the New York Mercantile Exchange. In response, OPEC has reduced daily production targets by 4.2 million barrels since September. Ministers will meet March 15 in Vienna to discuss whether to make further cuts. Algerian Energy Minister Chakib Khelil said Wednesday the group is likely to reduce output again.

Bloomberg