Oil prices can rise if OPEC delivers cuts

LONDON (Reuters) – OPEC must deliver fully on its promise to tighten supply by a record amount if oil prices are to stabilize above $40 a barrel and eventually return to much higher levels.

The 12 members of the Organization of the Petroleum Exporting Countries vowed on Wednesday to remove 2.2 million barrels per day (bpd), starting in January, to halt a $100 price collapse from a July peak.

“The proof of OPEC’s pudding this time really will be in the eating,” said Simon Wardell of Global Insight. “If OPEC can implement the cut it is promising, then oil prices will recover over time. If not, then it is quite a different scenario.”

A worldwide recession has battered demand for fuel and pushed oil on a five-month downward spiral.

Reuters