Thursday, January 22, 2009

They are running out of places to put it .....

From the Oil and Gas Journal:
MARKET WATCH: Signs of supply cuts raise crude prices
Sam Fletcher
Senior Writer

HOUSTON, Jan. 22 -- The new front-month March contract for crude rallied above $43/bbl Jan. 21 on the New York market among hopeful signs that members of the Organization of Petroleum Exporting Countries are adhering to their pledge to reduce production by 4.2 million b/d from September output.

OPEC sources said Saudi Arabia plans to cut its production an additional 300,000 b/d below its current quota before the group's Mar. 15 meeting. "This shows that the Saudis believe it is imperative to match a lower demand with a lower supply," said analysts at Pritchard Capital Partners LLC, New Orleans.
I'm not sure that oil is going to continue to sink, but over the last year, markets have moved much more quickly then a real physical commodity can adjust.  

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