News suggesting that production of crude oil is set to be cut in the near future has fuelled an immediate rise in oil prices. During the course of last week, the crude oil prices surged higher as OPEC announced a possible cut in production. The organisation of oil producing countries appears certain about a possible cut in production, which had sent oil prices tumbling in the past few months.
The long awaited rise
Oil prices have been stuck around $48 for every barrel over the past few months owing to a perpetual surge in production. Despite calls for an immediate reduction in the production of the commodity, many oil production countries had still kept their production at high peaks. But, the face of the market now appears to change as the prices of the commodity rose well over $48. This has been received with delight by most investors who were almost giving up on the commodity.
OPEC uncertainty worrying
But, OPEC appears to be uncertain about the direction it is going to take in a bid to curb production and especially to coerce high production countries to lower their production rates. Little information has been made available to investors regarding the stance that the organisation has taken on how to implement its plan to force a production cut. A number of investors remain concerned about this uncertainty, a developed that has fuelled the volatility of the commodity.
But, OPEC pundits claim that the oil production cut deal is almost done and only a few final touches are yet to be made. According to them, there is little that remains to be done before the deal can be sealed. This comes as a surprise since major oil producing countries such as Iran, Iraq and Indonesia have all expressed doubt about yielding to the demands of the oil production deal.