It seems then the OPEC action to cut production boomeranged on its face. The oil production cut is obviously a ploy by the cartel to spur another wave of oil price increases. By reducing production, the supply will drop and hence demand will rise, which could then result to an increase in oil prices. However, with the way things are going, the OPEC move is not effective, which is also good for the consumers. Let’s just hope oil prices will be stable in a long run.

However, the drop in the oil prices took its toll on the utility companies. Shares of the utility companies dropped sharply in the stock market. The recent announcement by OPEC to slash oil production did not have any effect, as crude oil costs fell even lower. But analysts said the weakening electricity demand is the primary reason in the drop in the utilities’ shares.

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Posted by Jones on December 27th, 2008 :: Filed under $$$ CRISIS, EVERYDAY MONEY STUFF
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