OPEC decided to cut its oil production by 1.5 MM barrels last week, about 5% of the oil cartel’s total daily output. But will this really stop the dead weight drop in crude oil prices?

“Venezuela’s Oil Minister Rafael Ramirez has said OPEC will need to cut production by at least another 1 million barrels daily to stop the fall.”

Energy analyst Victor Shum seems to agree that OPEC will have to tighten supplies further with a second cut in order to prop up oil prices.

According to an article from the Associated Press, oil prices dropped by 32% in October alone. I have addressed this same question in previous posts: Is OPEC losing its power over the price of oil?

“The power to influence oil prices is moving farther and farther away from OPEC,” said oil analyst Stephen Schork in a BBC article.  Even after this massive cut in production, I wonder if oil prices will continue to plummet?

Sources: http://www.msnbc.msn.com/id/12400801/

http://news.bbc.co.uk/2/hi/business/7687944.stm