Don’t panic on the OPEC production “cut”

Those in the know don’t believe it means anything:

The question in the oil markets now is how seriously the cartel will enforce the cuts. The cartel is historically undisciplined. Year after year, members have pledged to each other to produce only a set volume in order to keep world prices at certain levels, but privately they sell more to gain a windfall.

Oil prices fell by about $1 per barrel in the hours after Wednesday's announcement, as traders interpreted the details to mean that much of the cut would be illusory. "There isn't much credibility," said Marshall Steeves, an energy analyst at Refco Group, a New York-based financial services firm. "Overproduction or cheating -- call it what you want -- has been quite rampant in the last few months."

Opinion Journal has more on why gas prices are high and why tapping into the Strategic Petroleum Reserve is a terrible idea.