OPEC decides to curb overproduction

Although it is not an extremely large amount, 500,000 barrels per day in oil production reduction is still decent. Hopefully it will help to stabilize the oil price (and stop it from falling below $100) and in turn help to curtail the (temporary) rocket like power of the US dollar (which is a joke in the first place, in my view, given all of the fundamental data continously out of the US - major housing issues, major banks imploding, major credit crisis situation, major government bailouts of corporate companies, a US financial system that is held together with pins and needles, poor retail sales data, high unemployment rates, ongoing inflation issues, ongoing growth issues, major deficit issues, ongoing devaluation of the US dollar by having to continually print money to pay for everything (including 2 wars, and now bailouts), and I can go on and on and on). The US dollar has rocketed upwards recently partly due to concerns with the other economic powers around the word (Euro, Britian, Japan, Australia, etc.), but it has absolutely nothing to do with improvements in the US, in my view. As you can see, all of the problems I have listed with the US economy still exist, with absolutely no solutions in sight. The fundamental issues with the US still exist. If anything, it is growing worst by the day. IMO, the US system would have come close to collapsing (or resulted in serious panic) had the government not taken control of Fannie and Freddie, as those 2 companies are either directly or indirectly linked to about 40% (maybe 50%) of US mortgages, apparently. However, this is just a bandaid solution for these companies, as they still have to find the permanent solutions to their major problems. So, what ball is going to fall next in the US financial market, and will the government keep propping up all of these companies? Based on news today, Lehman Brothers could be the next major problem, hence the big market sell off today. Who is after that? Washington Mutual? Bank of America (as they don't seem to have a solution as yet for the ABCP Countrywide problem they took over)? Citigroup? These are major financial institutions that are at the backbone of America.

Yet, there is currently this love fest going on with the US dollar. It is quite amazing to watch, and hard to justify.

Anyway, here is the article on the OPEC reduction. By the way, OPEC controls 40% of the world's old production.


"VIENNA, Austria – OPEC oil ministers have decided to curb overproduction by more than 500,000 barrels.

The move is a compromise meant to avoid new turmoil in oil markets while at the same time reflecting OPEC attempts to prevent prices from falling too far. Crude prices have dropped nearly 30 percent since spiking to nearly $150 a barrel in July.

An OPEC statement issued after oil ministers ended their meeting early Wednesday said the organization agreed to produce 28.8 million barrels a day. OPEC President Chakib Khelil said that quota in effect meant that member countries agreed to cut back 520,000 barrels a day in overproduction."