CAIRO, Egypt – A crude oil production cut of even 1 million barrels per day at OPEC's upcoming emergency meeting is unlikely to reverse slumping prices in the short term, analysts said Sunday, amid mounting calls by several cartel members to take action to keep prices at the $80 per barrel level.
A decision by the Organization of Petroleum Exporting Countries to hold an emergency meeting next Friday clearly signaled the group's concern that the recent pummeling of crude prices would erode revenues needed to sustain government spending and weather broader fallout from the global financial crisis.
The meeting had initially been moved up to mid-November, about a month earlier than scheduled, but was pushed to Friday as the oil price dropped below $70 per barrel.
Analysts said some key producers may be eying the meeting as the first step in reasserting control over the market — particularly as the cartel has argued that record rallies earlier this year were driven more by speculation than supply and demand.
"What they really want to do is position themselves now in a situation where they can manage markets ... a lot more comfortably next year, and potentially for the recovery in 2010," said Raja Kiwan, a Dubai-based analyst with the Washington-based oil consultancy, PFC Energy.
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