Energy Investors Hope OPEC Production Cut Fires Up Sector

With OPEC poised to cut crude production by as much as 1.5 million barrels per day, investors are hopeful the cut might fuel the otherwise smoldering energy sector.

The Organization of Petroleum Exporting Countries reportedly will meet on Aug. 6 or Aug. 7 to cut its petroleum output. With OPEC's second-largest producer, Venezuela, already on record backing a production cut of 1.5 million barrels per day, the cartel is expected to have gathered enough member support to formally announce the emergency meeting today. The move comes in response to the recent swoon in demand for crude and a corresponding drop in price.

"Global oil demand is beginning to show signs of collapsing, as it did in 1998, under the combined pressures of a weakening global economy, a strengthening U.S. dollar and high oil prices," said Leo Drollas, chief economist at London's Centre for Global Energy Studies. "Each piece of new economic data that has become available over the past month has added to the gloom." ...