OPEC calls for 2.2 million bpd cuts

Well, given the oversupply, it has been a wonder of diplomacy that Saudi Arabia and related producers were able to hold off major cuts as long as they did. However, the concession to the price-hawks (Venezuela, Iran, Nigeria by some measures) had to come at some point. That point was reached today. Here's the rub on all that, though:

Steven Schork, who writes the Schork Report and is an oil industry analyst, said that oil traders are selling oil today because they believe the cuts came to late in the face of a slumping economy combined with the belief that some OPEC members will not keep their promises to cut production.

"Iran, Nigeria, Venezuela - they all have to produce oil at any cost," Schork told FOX Business. "There's significant doubts of compliance with these cuts."

...

Schork expects a 60-70% compliance rate with OPEC's production cuts, bringing the real net production reduction to approximately 1.5 million barrels a day.

And if that does in fact occur, expect the Saudis to hit back *HARD* with continued overproduction of their own.

In a related note: Russia claims a 30% cutback in their output to "coordinate with OPEC", but like the desperation producers listed above, Russia really can not slow down much at all. Finances will not allow it, and trying to cap Siberian wells in winter is fool's work.