Oil sinks despite OPEC

Production cuts are the topic of OPEC's emergency meeting, yet crude futures continue to fall as investors focus on slowing global demand.

Oil price's falling in concert with stocks today, and this is despite the fact that OPEC has expected to significantly cut production in the cartel meets later on this week. What's going on? Let's talk to trader, Anthony Grisanti, president, GRZ Energy. Here, with us now. From the floor, talk to us about why you are seeing this, why it seems OPEC isn't even playing in?

Well, right now, today the focus is on the dollar. We..we're about at a key 1.30 level(是对欧元的汇率). It's right above it. And really it's the strength of the dollar, that has made oil weaker today. And, you know, going over to OPEC. You know, we pretty much know that they wanna cut Friday. But most of traders feel down here: they are gonna have to cut a significant amount to have any impact on this market and to have these prices go higher. And by significant amount, I am talking about four to five million barrels a day. And I really don't see that happening. In fact, any kind of the cut we see, I expect, one to two million barrels. And I don't really see in that have a lot of influences on prices right now. And word to down market, we wanna thaw rallies out here,it looks like it is gonna continue. We had Chinese economy, the growth revised down for next year and for the rest of this year. Of course, the U.S. is the same way. So really it is all about demand and the dollar right now. And OPEC is kind of on the sidelines.

Alright. Let's say, OPEC does cut a significantly four or five billions barrels a day, what then happens to oil prices when you are dealing with slowing economies around the world, and as you said the stronger U.S. dollars than we've seen in the long time.

Well, if they do cut the four or five billion , you will see its initial spike,that's for sure. Probably to about the 85 dollar level. But , I think, at that point, you are gonna turn around and look to see what the demand is, even at the low levels that OPEC is producing. And I don't think we are gonna see the demand may, will be there, even for those numbers. So, I expect that the market will be very weak or will be very range-bound, say, between 70 and 90 dollars. But if they come in less that cut,if they come in and say one and two, (Yeah. ) I think we'll take a shot towards 60 dollars. at this point.

You know, finally , the shift that's happend this fall, so interesting as you see oil moving concert with stocks, which is the opposite of what we saw all summer. How long does that hang on? How long is that the case? Will these two move together? And it's really the demand that play?

Well, I think , it's a matter really... I don't think they are so moving in tandem together. I think it just , kind of... it seems that way. And that's the way it's working out. But really it is about the demand in oil and when that demand starts to picking up , then you can see, you know, uh, the market. And actually the stock market could pick up at that point too, because a bigger demand means that economie's doing a little bit better. But I don't think there 's link as we think they are. I think it's just a moving tandem right now. Just a coincidence at this point.

Alright,Anthony , appreciate your expertise, thank you.