The question facing the OPEC oil producer group which meets Tuesday is when, not if, to cut its oil production target as crude prices slide in the face of weakening economic growth, analysts say.
Most analysts surveyed by AFP expect the 13-nation cartel to agree to trim its output informally at its meeting before waiting until later, possibly at a scheduled gathering in December, to alter its official target.
The trimming will be achieved by members, mainly powerhouse Saudi Arabia, agreeing to cut their excess production above their OPEC quota, which would remove oil from the market but not amount to a formal change in policy.
Under fierce pressure from the United States, Saudi Arabia agreed in May and June to increase production to help calm the runaway crude market which reached a pinnacle on July 11, when crude struck 147 dollars a barrel in New York.
"Even Saudi Arabia doesn't want the price to come down too much," said analyst Manouchechr Takin at the Britain-based Centre for Global Energy Studies (CGSE) referring to the moderate and pro-US Middle East producer.
The stakes are entirely different to the last time OPEC members met in March, when crude prices had broken through 100 dollars a barrel and were on a steep upwards trajectory.
This time, oil prices are on the way down approaching 100 dollars a barrel -- a level many members, above all the traditional price hawks of Iran and Venezuela, are keen to protect.
But economic conditions, which determine demand for oil, have worsened considerably, with many European economies facing recession, the United States struggling and fears growing about the emerging economies of Asia. (Source:AFP)
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I have not traded the oil market last week. If you observe following Gustav, the market never provided an edge. We will have to wait and see.
