Opec Speaks And The World Shrugs

It's a measure of just how much of a paper tiger oil cartels have become that few people outside Wall Street really cared about the announcement by OPEC members late last week. Key OPEC countries--including Saudi Arabia, Iran and Venezuela, as well as non-OPEC member Mexico--seeking to raise oil prices further, pledged to cut production by 2 million barrels a day by April 1. And this time, the OPEC producers said, they really meant it.

Despite some production cuts already, many experts are skeptical of OPEC's ability to follow through. "I don't believe it," says oil analyst Phil Verleger. "OPEC for the last several years has been an eating and drinking society." He points out that the members have not set individual quotas. Even so, Verleger says, if the Saudis and others carry out their plan, prices at the pump could shoot up by 18 to 20 cents more than current levels, which have been creeping up in recent weeks. Still, for much of the world, deflation now seems a far bigger threat than inflation. In the face of continuing recession in Japan, Asia and Russia, a mild uptick in oil and other commodity prices may not be such a bad thing after all.

Opec Speaks And The World Shrugs | News