Watching oil prices

TEXT OF STORY

MARK AUSTIN THOMAS: Two months ago British oil giant BP cut production from its oil field in Alaska. The reason was a rusted pipeline. Now the company is ready to bring the field back online. The timing couldn't be better. Yesterday there were mixed signals from OPEC with some signs the cartel would cut worldwide oil output by a million barrels a day. Marketplace's Brian Watt has more.


BRIAN WATT: Yesterday, OPEC's President, who's also Nigeria's oil minister, said he and his colleagues agreed that something needed to be done.

He didn't say exactly what or when, but the mere hint of a production cut was enough to boost oil prices. Such a reduction would be the first by OPEC in more than two years.

Today, traders are keeping an eye on Saudi Arabia. Word is, it may cut production by 300,000 barrels a day.

The cost of crude has dropped 23 percent since July, but the freefall will only go so far.

Peter Dunay is chief investment strategist at Leeb Capital Management in New York.

PETER DUNAY: "The days of $20 and $30 oil are gone. So the question is: What will the upside range be?"

Dunay says only consumers can answer that.

If we keep guzzling gas, he says oil could easily get back above $75 a barrel and beyond.

I'm Brian Watt for Marketplace.

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