"No Mas" for OPEC oil and dollar pegs?

So, OPEC says "no mas" in response to pleading by the U.S. to boost oil production. Could they if they wanted to? That's the more important question that no one seems to be asking at the moment - not "will they?", but "can they?"

We'll probably find out soon enough. Until then, this report from the Financial Times fills in some of the details on the question of "will they?"

Opec on Wednesday rejected calls from the US, its largest customer, to agree to increase production when it meets for its summit in Riyadh at the weekend.

Abdulla El-Badri, Opec secretary general, said that there was “not shortage of oil” in the market and deferred any decision on production to the next ministerial meeting of the oil producers’ cartel in Abu Dhabi in December.

“At this time, frankly, we don’t see that we need to add any oil, but this is up to the ministers to decide” Mr El-Badri said in a press conference, suggesting that the ministers of the oil cartel might decide against raising production at the Abu Dhabi meeting.

The comments came after Samuel Bodman, the US energy secretary, urged Opec on Tuesday to raise production this weekend. He said the price of oil was at such high levels in part because developed countries’ stocks were below their five-year averages.

And Ambrose Evans-Pritchard files this report in the Telegraph about more Middle East countries looking to unhitch their currency wagon from the U.S. dollar horse that has served them so well up until recently.

It looks like it will soon be "no mas" for dollar pegs due to what is now one of the biggest American exports - "inflation".

Sultan Nasser al-Suweidi, the central bank governor of the United Arab Emirates, warned that Gulf states may have to defend themselves against imported US inflation.

"The dirham's peg to the US dollar has served the economy of the UAE very well in the past. However, we have reached a crossroads now with a further deterioration in the US dollar," he said.

The Gulf region has some $3,500bn (£1,690bn) in central bank coffers and wealth funds, so any shift in strategy could have a major impact. Kuwait has already ditched its peg, and Qatar's $50bn wealth fund has slashed its dollar share of its holdings from 98pc to 40pc.

Others have hung on to their pegs but the policy is becoming untenable amid rocketing real estate and food prices.

Inflation has reached 4.9pc in Saudi Arabia and 9.3pc in the UAE. Both have refused to follow the Federal Reserve in cutting interest rates, but this has drawn a flood of hot money into their economies.

Some are now "calling the bottom" for the U.S. dollar decline in foreign exchange markets - are those calls going to be any better than the ones made last year for U.S. housing and a few months ago for credit markets?