The OPEC oil group has agreed to cut its real output by 520,000 barrels per day in the next 40 days, OPEC's President and Algerian Energy Minister Chakib Khelil said Wednesday.
When asked about the size of a proposed cut to OPEC's current production, Khelil replied: "I think if you do your own calculations, it is a cut of 520,000 barrels per day."
That is a large cut and is obviously meant to drive prices back to the $4.00 level. This is proof positive that conservation and reduced usage due to a poor economy will not work to control prices.
The only thing that will work is if we have enough oil produced in the US that we can effectively change the amount of oil produced.