Looks like the Saudi’s caved in to 1.5 million Bbl cut. My version confirms Saudi’s took -466k, Iran took -199k, and Venezuela took -129k and Kuwait took -132k. Claim is they will reduce another 500k if needed. All others tried to push for price target (which was probably in the $75-90/Bbl range Iran, Russia & Venezuela need) which may have been reason for the Saudi go-along on the volume cut.
Don’t think this will be any more effective than last months -500k cut …. after they totaled all cuts up there was actually a +390k increase instead cut. These idiots have not realized that the Saudi’s have no intention of making up their cuts + increase they really do …… at least not until market prices drop below the Saudi’s budget numbers of $30-40/Bbl.
The recent Oil finds/New supplies will make any this years OPEC cuts moot : like Mexican Senate passing Bill on Oil Reform / outside private participation (even weak as it is can always be improved – the breach was the important move), plus the BIG field finds by Petrobras, MacMoRan big offshore find, US large Brakken oilfield developments & all new Canadian Bitumen P/L supplies at time when China has really pulled back on consumption is going to really drop demand & keep prices to pre-speculation ranges for while.
The real hurt has to be Oil Co’s LIFO & Reserve revaluation at EOY….. it’s going make Upstream & Integrated Oil Companies artificially low for first of 2009 year & that is reason I think more merger & consolidation is likely to happen in US with its low economic conditions and heck of “buy opportunity” for other companies reserves (just not in $6/Bbl range this time but heck of lot cheaper than the $18-40/Bbl conventional & $40-80/Bbl non-conventional & deepwater conventional crude replacement values they would have to find). Companies with LT views should really make some strategic reserve purchases this time (not just do the cheap refining asset purchase like Tosco/Phillips and Valero did previously).