Sharekhan Commodities Buzz dated December 15, 2006

Crude oil: OPEC cuts production by 500,000 barrels/day
Yesterday's OPEC meeting was a big market-moving factor for the oil counter. Registering a low of $61.375 per barrel, January crude oil futures recorded a high of $62.725 and closed marginally off the intra-day high at $62.525. According to OPEC, market fundamentals clearly indicate that there is more than ample crude supply and stock levels are high. Further, OPEC opined that the November output stabilised the market and has decided to trim production by 500,000 barrels/day, effective February 1, 2007. Expect the prices of crude to be firm with $60 forming a good base.


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