OPEC ministers agreed earlier, at a closed meeting of the 11-nation cartel in Abuja, Nigeria, to leave oil production unchanged for now but to lower it by 500,000 bpd from Feb 1, 2007
The decision was confirmed by OPEC President Edmund Daukoru
Oil prices rose in response although they were up by nearly a dollar ahead of the announcement. Jim Ritterbusch, President of Ritterbusch & Associates said the 500,000 barrel cut had been partly discounted at around 62 usd
1.) The agreement gives OPEC some wiggle-room. The cut is not immediate, but will occur in February. If the market changes radically they may consider changing their decision.
2.) I would guess this would put a floor on oil at roughly $60/bbl (more or less). That could have inflationary implications for the US.
3.) I haven't seen anything about how the last OPEC cut is being implemented. So, I don't know if it was all talk or whether there was any action as well.
