Stop me if you heard this one already:
OPEC stands ready to cut yet more oil output at a meeting next month, its fourth reduction since September, to revive prices battered by the first demand drop in more than 20 years.
A cut of around 1 million barrels per day (bpd) could be discussed by the organization's ministers at their March 15 meeting in Vienna, an OPEC source told Reuters.
The general problem with cartels, is that when you need them to work the most, they tend to be the least effective. It's not just that OPEC has lost credibility, it's that they have lost so much credibility that it strains the imagination to expect their cuts:
A. To be implemented without rampant cheating.
B. To be effective even if cheating is limited.
We think cheap oil is terrible as a general matter (at least this is our public view- secretly we don't). We think it brilliant during a deep and painful recession. We also think it temporary, but not because OPEC has anything to do with it.
Still, we have to wonder what an increasingly panicked OPEC will do. Should be entertaining.
OPEC ready to cut more oil to defend price [Reuters]