OPEC cut is backfiring on them

This is great news:

Oil options contracts to sell crude at $50 by December almost tripled today after an OPEC decision to slash production failed to allay concerns that the global economic slump is hurting demand.

The cost of the $50 December 2008 put option, which gives the holder the right to sell oil futures at $50 a barrel, rose as much as 142 percent to $1.50 on the New York Mercantile Exchange, compared with 62 cents yesterday, according to exchange data.

“It certainly seems to me that we could get down to $50 a barrel,” Adam Sieminski, Deutsche Bank’s chief energy economist, said in a Bloomberg Radio interview today. “You could look at the OPEC cut as a sign of weakness, not strength.”

The cost of the option jumped on speculation that an output cut announced today by the Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, won’t be enough to stem plunging prices.

Ladies and gentlemen, can we have a little Nelson here, please?

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