Oil situation in doldrums!!!!

Oil is in doldrums with lots of forces creating problems for investors. There have been three sides to this story , like yesterday’s report of mine said that the US cold weather will create a lot of demand for heating oil , this will create shortfall in oil supplies. Apart from this, OPEC (the Organization for Petroleum Exporting Countries) has shown concerns that their oil supplies have increased tremendously and that they would like to cut supply, there is another reason to their possible oil cut, is that the Dollar weakness has eroded the value of crude revenues for OPEC’s members and this may also encourage some to vote for a cut their next meeting on December 14 in Nigeria.

It is very likely that OPEC would cut oil supplies even more apart from the already 1.2 million a barrel a day cut. This supply cut may create some panic among investors, but there is also another side wherein oil inventories have actually risen 1.1 million barrels last week showing that OPEC’s calculation of supply exceeding the demand.

I personally feel unlike yesterday that oil would remain in the margin of $62 to $65 a barrel even if the OPEC decides to cut inventory as there is sufficient supply and demand and OPEC members feel that this would be a good idea for them since it gives them a lease of air from the losses they are facing because of the dollar slide because the crude oil is traded with dollar and hence the problem.