a surprise move, OPEC this week slashed production quotas for its
members – which immediately affected oil prices and energy stocks.
its Vienna meeting, the 11-member cartel, which controls nearly
40 percent of the world's oil production, moved to shore up sagging
oil prices by cutting its production target by 900,000 barrels a
day to 24.5 million barrels a day.
result was that oil prices experienced their biggest one-day jump
in nearly two months, rising $1.11 a barrel to $28.24 in New York
Mercantile Exchange trading. The move is expected to lead to rising
crude oil prices and higher fuel prices at the pump –which would
reduce a four-week decline in average diesel prices.
to press reports, the move shocked analysts, who expected little
change, even though oil prices had fallen about 15 percent the past
month. The meeting was supposed to result in no change to quotas,
despite expected production gains in Iraq, Venezuela and elsewhere.
group's goal has been to keep the price of the crude its members
produce between $22 and $28 a barrel. Recent prices for what's known
as the "OPEC basket" had been at $25.14 Sept. 23.
commodity prices are expected to fall, as they have been this month,
speculators sell oil they don't yet own with a plan to buy the commodity
at a lower price in the future to cover what was borrowed.