Flash back to December 17 when OPEC met in Algeria and announced a record 2.2 million barrel per day production cut. The global economy was in shambles, oil demand was in free fall, the price per barrel had just dipped into the $30s and oil-producing states were complaining about plummeting oil prices.
Three months later, shambles is perhaps too soft a term for the current economic situation. Oil demand is still faltering, and members of the Organization of the Petroleum Exporting Countries are headed for their next meeting still complaining about the price of crude, raising the question: What is new?
For one, prices have stabilized somewhat, at least in context of the most volatile price swings in history.
The price for a barrel of oil hasn't closed below $40 in two weeks.
How OPEC perceives changes in the market could factor prominently in determining the pace of the global economic recovery in the months to come. Is the relative stability in pricing enough?
"Aggressively pursuing an even higher oil price rather than a price floor can easily backfire," said Harry Tchilinguirian, senior oil analyst with BNP Paribas S.A. in London. "My personal take is that they're probably going to emphasize more the compliance with current cuts .... than seek an aggressive stance, especially in the current economic climate."
Compliance has typically been the bane of the organization whose member states rely on oil revenues, but have starkly different economic needs _ especially in this global financial crisis.
For once, it appears OPEC has managed to largely keep its promise and has enacted between 80 percent to 85 percent of the 4.2 million barrels per day in reductions it pledged in three separate cuts, according to OPEC figures and analysts.
Still, crude prices are far from the $75 per barrel level that OPEC kingpin Saudi Arabia has dubbed as fair.
But the group's success may be better measured in what it has helped prevent, versus what it has achieved. In that case _ with a couple of exceptions some weeks earlier _ what it has been able to avoid is allowing oil to slip below a floor of $40.
Sticking to economically painful production cuts right now could help the group engineer a rebound later this year, or in 2010, when global oil demand is expected to rise.
In the short and medium term, compliance could be more valuable than enacting yet another round of cuts before adhering completely to the already pledged reductions.
In a market where analysis is more akin to reading tea leaves than a scientific exercise, many investors and traders appear to be reading more cuts in the cards. As a result, prices have remained in the mid-$40s this week, with the April delivery U.S. light sweet benchmark WTI crude contract trading at $45.35 Wednesday on the New York Mercantile Exchange.
Fueling that perception have been the usual comments by some OPEC ministers indicating that more reductions are "possible," though few to none have said they are probable.
Iran, a traditional price hawk, has suggested another cut was not in the works and that it will focus on a mechanism to repair prices but not reduce output.
The often differing comments reflect the varying challenges OPEC members face. Saudi Arabia, OPEC's top exporter, is well positioned to withstand the global meltdown because of a massive economic windfall last year from record oil prices.
In Iran and Iraq, where budgets are under strain, higher oil prices are paramount.
The Saudis are generally loath to speak ahead of OPEC meetings. But they are the group's real power broker, shouldering most of the output reductions amid typically weak compliance by nations like Iran and Venezuela.
The remark buttresses the argument that cuts without commitment are pointless.
In the U.S., the world's top energy consumer, crude stocks have leveled off at about 350 million barrels after massive builds over the past couple of months. Energy Department figures released Wednesday for last week show that crude stocks rose by 700,000 barrels to 351.3 million barrels, or about 16 percent above year-ago levels.
But net imports also fell by 174,000 barrels, suggesting that OPEC cuts are reducing supply. Crude stocks in the U.S. are no longer showing the massive buildups that at one point reached more than 7 million barrels in a week.
"When you see inventories in consuming countries fall materially, then there will be a more durable shift in market sentiment," said BNP Paribas' Tchilinguirian. "The question now is maintaining the level of cuts for sufficiently long for this to happen, which of course will be a challenge."