Don't hold your breath – looks like OPEC needs more time!

Well then – it looks as though OPEC, Russia and other major oil producers have agreed this week that they are going to hold their collective brush power for another nine months.

The cynics among you will spot that these coordinated production cuts are aimed at repairing the massive supply glut that sent our precious crude crashing to unthinkably-low prices last year. You truly would have had better luck buying a lottery ticket!

So, while OPEC's seemingly unflappable ability to cobble together an agreement has managed to keep a floor under prices this year, the group's tactics haven't fixed the underlying problem. Or at least, not quite.

In spite of OPEC and Russia's output cuts, oil stockpiles in the US and other major economies remain rather obstinately high – never mind the impatient investors, that's causing all sorts of problems.

In the US, which has the most timely inventory data, there are 516.3 million barrels of oil tucked away. That's not only way above historical norms, it's 6% higher than when OPEC first decided to constrain output in November.

Oil stockpiles in advanced countries in the OECD jumped by 24 million barrels during the first quarter to a new record of 1.2 billion. But still, crude oil prices plunged 5% to below $49 a barrel after this week's OPEC meeting, reflecting nerves over the group's strategy.

Many investors had been hoping Saudi Arabia and Russia would pressure fellow producers to either make deeper cuts or to hold their fire power for even longer.

We have to be careful now, because prices seem as unpredictable as policy. So, how is the gold price doing?!

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