OPEC production cut expected, prices higher
Last Updated: Monday, December 15, 2008 | 12:03 PM ET
CBC News
Oil prices rose Monday in anticipation of a production cut announcement by OPEC members later this week.
In late-morning trading on the New York Mercantile Exchange, light sweet crude for January delivery was up $1.14 at $47.42 US. Earlier, the price for a barrel of oil briefly traded at over $50 US.
The members of the Organization of Petroleum Exporting Countries are expected to make a large cut to their output at a meeting Wednesday in Algeria.
"The extent of such cuts is still unclear and this uncertainty has been a source of continuing volatility in futures markets," said a report from analysts at KBC Market Services in Great Britain.
Christopher Moltke-Leth, the head of sales trading at investment firm Saxo Capital Markets in Singapore, questioned whether OPEC members will have the discipline to stick to a reduced production targert.
"Unless they really surprise the market, this cut may not support the price much," he said.
Down about $100 a barrel from its high in July, the price of oil has wilted amid worries about the state of the global economy.
Moltke-Leth said he expects crude to keep sliding, predicting the price could get as low as $30 US per barrel.
With files from the Associated PressShare Tools
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