A US$70 oil floor? Fat chance, but Opec price plan may be first step

New York

THE safe money for oil traders is betting that Venezuela's plan to resurrect Opec's old price band mechanism, attempting to set a US$70 floor for the battered market, will be doomed from the start.

Saudi Arabia, the de facto leader of Opec (Organization of the Petroleum Exporting Countries), has shown zero interest in returning to a strategy of supporting prices; big producers outside Opec, namely Russia, have essentially ruled out cuts. Most analysts say attempting to set a price range is futile, or that the US$70 price is unsustainably high, or both.