To cut or not to cut – that is the question which fixates the members of the Organisation of Petroleum Exporting Countries when they gather regularly to discuss such issues as tightening production.
But in the oil world what is said is not always what happens and OPEC delegates can manipulate the market as much with words as with the amounts of crude that flow through the pipelines. The perception of how much oil is being – or will be – produced can have a profound effect on the price. So before, during and after events like the Cairo meeting cartel members drop hints about production levels to see how the market will react. If the response is not to their liking, policies can change before they become official. Keeping their intentions hidden also thwarts the efforts of speculators who try to profit from rising or falling prices. That is why sometimes the outcome from OPEC meetings runs completely contrary to what is expected. Industry observers says that the different producers’ domestic needs are also a factor. Many Opec members – particularly those in the Middle East – are relying on higher oil prices to support their economies burdened by growing populations and high unemployment