Oleaginous means: 1. Resembling or having the properties of oil; oily; also: containing or producing oil; and 2. Marked by an offensively ingratiating manner or quality.

Based on the recent flip-flopping OPEC's been doing about its supposed “emergency meeting” I'd call the oil cartel's stance particularly oleaginous. Now, instead of leaping into cut production again, OPEC is sitting back, apparently happy with the market's supply of oil.

We can understand why OPEC is having such difficulties deciding what to do about falling oil prices.

You see, it needs people to believe it's got control over the price of oil.

It's a fine dance on a slippery slope. Add to that OPEC's mental tug of war over oil revenues, and you've got a Spring Grove field trip to the local ski resort. In theory, a cut in production would buoy prices because less supply in a tight supply/demand situation automatically produces fears of scarcity. On the other hand, a cut in production also takes oil revenues away from member countries.

They are already paying for this sharp drop in oil prices, and another cut could cripple them even more.

Just look at the Saudi Arabian stock market…

Back in February 2006, it hit an all-time high of 9,082.44. It has since fallen to a 52-week low of 3,057.21… losing more than two-thirds of its value.

The UAE's market went from a high of 6,135.31 at the end of 2005 down to a low of 3,321.25 at the end of 2006. That's a drop of nearly 46%.

And let's look at the behavior of OPEC. It announced it would make production cuts when prices dropped into the low $60's, and the price of oil stabilized for a bit. But only for a bit. The price of oil fell further -- into the mid $50's and OPEC announced it would trim production yet again.

Oil prices climbed back up, and then fell sharply. Again, OPEC announced it would hold a meeting to discuss production cuts, saying the market was still oversupplied. Oil prices fell even further.

And that's when OPEC (or at least Saudi Arabia) promptly announced that it would not back further production cuts.

I'm trying to say the reason OPEC is flip-flopping is because it wants us to believe it is “allowing” the price of oil to drop. That way, when the oil cartel wants to prop up the price of oil with another production cut announcement, we give it more weight, and it becomes a self-fulfilling prophesy.

We've learned from oil's recent action that the market is in charge, not OPEC.

And right now, the market has a decidedly bearish sentiment. At least it's not oleaginous. Perhaps you could call it fickle, but what speculative trader isn't?