OPEC to Cut Production - Morgan Stanley

June 6, 2012 7:37 AM EDT Send to a Friend
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Analysts at Morgan Stanley expect OPEC to cut its production by 1.15 million barrels a day. They will meet on June 14th and markets, as always, will be eager too hear what the Saudis have to say. OPEC output has been at highs due to increased output from Saudi Arabia, which some say is meant to balance out reduced supplies as the Iranian embargo takes hold.

The global crude market is adequately supplied even with a drop in Iranian exports, Hussein Allidina, head of commodities research at Morgan Stanley said. OPEC should reduce supply because oil inventories will build by 320,000 barrels a day more than would be seasonally normal during the third quarter as OPEC is producing at elevated levels near 32 million barrels a day.

United States Oil (NYSE: USO), an ETF that tracks crude oil prices in the U.S. has fallen 14 percent in the past 30 days. The sell off is tied to solid production and inventory levels combined with tempered expectation for global growth.

US crude inventories for the week ending June 1st are expected to show a drop when reported later today.


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