Wednesday, September 10, 2008

Opec decides to curb output

Classic Opec ploy. Fool the market into thinking they are going to do nothing. (In this case, saying they would keep output steady and driving prices down, then announcing a surprise cut.) They buy futures aggressively as prices fall and they will profit handsomely now that prices increase on the production cut. By doing this, they maintain their huge profits without ever having to take their oil out of the ground. The markets get fooled every time.

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