by Calculated Risk on 6/08/2011 06:30:00 PM

From Jim Hamilton: The significance of OPEC announcements. Professor Hamilton reviews the OPEC announcement today, and points out that quotas for OPEC have been routinely ignored. He concludes:

I think today's announcement that this "quota" will remain in effect is largely irrelevant. At best the statements issued from these meetings provide a noisy signal of the intentions of some OPEC members.

But if you're interested in what OPEC members really plan to produce, my view is that actions speak louder than words.

The announcement might be "largely irrelevant" as far as actual production, but there was a market impact with WTI crude futures up over $100 per barrel (and Brent crude close to $118).

The good news is gasoline prices are down about 24 cents per gallon from the recent peak (down over 30 cents where I live). And it looks like gasoline prices will probably fall some more ... but oil prices at $100 per barrel is still a significant drag on the economy.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

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