The refusal by OPEC to cut production in the face of prices plunging to 5½-year lows shows the cartel is looking to put a lid on the U.S. fracking boom, former Wells Fargo (WFC) Chairman and CEO Richard Kovacevich told CNBC on Tuesday. U.S. crude prices were lower again in early Tuesday trading-below $49 a barrel at one point-following Monday's 5 percent drop in New York to lows not seen since April 2009. The price collapse has been pressuring stocks, which saw the Dow Jones Industrial Average (Dow Jones Global Indexes: DJI) fall 331 points Monday, the worst session in three months. He said there's 1 million barrels a day in excess oil capacity on the world market-an amount the Saudis could withstand to cut.
CERRFINANCE: It is not only oil prices causing markets to fall but also nothing else for the Feds to consider giving away. We have ended quantitative easing and the only card left for the Feds is raising interest rates. The markets already know that interest rates wont be raised until the end of the year so what is next to spur the economy. When the GOP gets to works more cutting will soon follow to slow growth. No new main stream ideas will come from the GOP only investments or corporate tax cuts for the wealthy. To pay for the tax someone else will have to pay or loose further stunting growth. We are now in a wait and see mode. The only thing left is for the Saudis to start selling oil and increasing supply. Until that happens states that have heavily relied on oil will soon start seeing rumbles in their budgets.