Perhaps it's time for just a bit more perspective-and a bit more clarity-from OPEC. Does it intend to sit back and say nothing about commodity prices, which many fear might be headed for a rout unless the cartel cuts production now, or will it get off the dime and explain what its equilibrium price is for oil?

More and more, that's the question daunting investors, says one market maven.

Obviously, the market's confusion about OPEC's role as a price stabilizer is that it has never spoken with one voice about the price floor it is willing to defend, says New York-based Bernard J. Picchi, senior managing director for Wall Street Access, an independent brokerage firm.

"But maybe that's a good thing," he says. "Drawing a price line in the sand could stir up a hornet's nest among the [OPEC] producers themselves. Still, the market needs a convincing, even if rough, idea of what Saudi Arabia-OPEC's largest and influential member-sees as the price level that allows it to meet its budgetary needs without inducing demand destruction."

As Picchi views it, that equilibrium oil price is now $50 to $60 per barrel. He notes the $5- to $10 billion worth of projects that international oil companies are planning in Canada's Athabasca tar-sands region and other places require oil prices in that range to yield acceptable returns.

"Our conclusion is that [such] alternative energy schemes-Canadian oil sands, gas-to-liquids and ultra-deep oil production in places like the Gulf of Mexico Tertiary Trend-are not a luxury, but a necessity to balance oil supply with demand five to 10 years down the road."

The cartel need not adopt formal production cuts to keep oil prices in the $50 to $60 range, he points out. "The Saudis, whose oil production accounts for one-third of OPEC's total output, need only tap the production brake lightly to achieve this price objective."

Where does all this leave energy investors? Obviously, oil shares don't tend to perform well when that commodity falls in price, "though investors can take comfort in knowing the shares of major oil companies discount an oil price of $35 to $40 per barrel," Picchi says.

"The real risk in holding energy shares today is that companies in this sector...will underperform the market as oil prices find their way to a sustainable price equilibrium."

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